Tute 3 (Melany)

Question 1

How can you improve security of payment from individual clients? (2)

Answer 1

1) Check if they are the owner of the property (via a Title search).
2) Request your lawyer to put a caveat on the Title to ensure the property can’t be sold without payment (they can then sue you in return for the value of the fee).

Question 2

How can you improve security of payment from incorporated companies? (4)

Answer 2

1) Inspect company’s financials via ASIC (public companies only).
2) Director’s (personal) Guarantees. Make sure all Directors sign.
3) Bank Guarantees (easier to call upon than DGs)
4) Ideally contract with a Director, rather than the Company.

Question 3

What are the 8 valid reasons for resigning a commission/contract with a client?

Answer 3

• Client’s NON-PERFORMANCE TO CONTRACT.
• Client’s persistent instruction/s that are in CONFLICT with the architect’s statutory or professional obligations.
• Non-payment of FEES
• REFUSAL TO PAY for protracted or increased services, site surveys or the engagement of consultants
• Persistent and/or UNREALISTIC requirements regarding budget or time
• Persistent BYPASSING THE ARCHITECT to deal directly with subconsultants, the contractor and/or subcontractors and therefore opening up the architect to LIABILITY such as bad coordination etc.

Question 4

What information is required to adequately determine Client fees?

Answer 4

• Historical fee records
• Clear understanding of scope
• Realistic hourly rates for staff
• Appropriate margin for profit
• Appreciation of market conditions

Question 5

What 3 considerations are typically used to determine charge out rates?

Answer 5

1) Salary
2) Factor for overheads or on-costs
3) Realistic allowance for profit

Question 6

Outline the process for recovering unpaid fees. (1 - 10)

Answer 6

1) Lawyer’s letter
2) Debt collection agencies
3) Alternative dispute resolution
4) Compulsory meeting
5) Conciliation (with the assistance of a third party)
6) Mediation
7) Expert Determination
8) Adjudication under Security of Payment Legislation
9) Arbitration
10) Court proceedings

Question 7

What is a ‘Collateral Warranty’?

Answer 7

“A contract which gives a third party collateral, or running side by side, rights in an existing contract entered into by two seperate parties.”

(Avoid this, and notify your PI insurance if your non-standard CAA includes Coll. Ws).

Question 8

What should you do if you must begin work on your project before the CAA is signed? (1)

Answer 8

Write to tell the client that you will proceed in accordance with the conditions stated in you CAA until the written acceptance is received.

Question 9

If you are not engaged for contract administration services, what advice should you give your client in writing? (1)

Answer 9

To engage a clerk of works or independent building inspector.

Question 10

Does the architect or client control the ‘Cost of Works’ in the traditional CAA?

Answer 10

The Architect.

Question 11

Does the architect or client control the ‘Total Project Cost’ in the traditional CAA?

Answer 11

The Client.

Question 12

Define the Cost of Works in the CAA…

… and is it incl. or excl. GST?

Answer 12

The final cost of all work designed, specified or scheduled by the architect & specialist consultants.

It is excl. GST.

Question 13

Define the Total Project Cost in the CAA…

… and is it incl. or excl. GST?

Answer 13

GST Inclusive of the Cost of Works, plus all other associated project costs, such as removal & relocation, architectural & consultant fees, authority fees, loose furniture, marketing & promotional costs.

Question 14

When charging a % fee, is the Architect’s fee based on the Total Project Cost or Cost of Works?

Answer 14

Cost of Works (this is excl. GST)