Architect's fees: about 10% of construction costs?

Question: Aren't architect's fees usually around 10% of construction costs? Why is the quote I received higher?

Answer: Every project is unique, so it shouldn't be a surprise that the design fee is unique too. That sounds like a cliché, but it's usually true. The "10% rule" works well as a rule of thumb for a new building of a certain size with no special requirements (for example, no difficult site and simple expectations for design and fittings). Here are a few examples:

Case 1: A new building costs €250,000 gross. Only net costs count towards the fee, so about €210,000. A very simple residential building would fall into fee zone II. The fee would then be about €29,000 (base rate) to €35,000 gross (maximum rate). However, a residential building with "average" requirements would already fall into fee zone III, and a demanding one into zone IV. The highest possible fee under the HOAI would then be about €48,800 gross. So the fee ranges from 11.5% to 19.5%, depending on how complex the project is judged to be!

Case 2: A new building costs €800,000 gross. For these construction costs, the fee would be between €81,500 and €126,300 gross, so between 10% and 15.7%.

Working with existing buildings also involves many unknowns. This makes the design work more time-consuming and riskier than a new build on a greenfield (and flat) site. Parts of the building may need to be opened up for inspection. Far more details are needed than for a new build, because of the many different existing conditions or non-standard details that take time to solve. Once construction starts, surprises often come to light that need a response. For this reason, a refurbishment surcharge of 10–33% (up to 50% for interiors) is often added to the fee. Heritage protection, difficult sites or work in an occupied building can also justify a higher fee. In Case 1 above, with €250,000 construction costs, the fee could exceed 25% for a complex conversion, for example one with heritage requirements, a complex use and a difficult site.

This fee also only covers basic services, which don't cover everything in many projects. Digitising the existing plans of a building, for example, is a typical "special service". It's usually needed when working with existing buildings but isn't included in the HOAI fee calculator at all. If these plans need to be produced, there are additional costs, billed either hourly or as a flat fee depending on the building.

One more point on fees: since 2021, the HOAI is no longer mandatory, so any fee can be negotiated. But because the HOAI is a proven and transparent method of calculation, it's still widely used. It doesn't work for small projects (under €50,000 construction costs), though. These are often billed hourly, which means design costs can become decoupled from construction costs. An extreme example would be designing a DIY project (such as a garden shed) using materials you already have. In this case, the design could even cost more than the build.

What other design costs are there?

Question: What other design costs should I expect? Is the architect's fee essentially it?

Answer: It depends. For any custom-designed new building, you'll almost always need a structural engineer (or another designer authorised to submit building applications who can do the structural calculations; for small residential buildings, this can even be a carpenter). If a building has a type-approved structural design (a tiny house, for example), at least the load transfer into the foundation and the foundation itself need to be calculated. When converting an existing building, it depends on whether load-bearing elements are being changed.

Besides the structural engineer, other specialist consultants might include:
a geotechnical engineer, fire safety consultant, energy consultant, building services (MEP) engineer, electrical engineer, acoustic consultant, landscape architect and hazardous materials surveyor. Independent checking engineers for fire safety or structural design may also be required. Realistically, total design costs (architect plus consultants) come to 15–35%.

Which consultants are needed is usually clarified during the initial project assessment (service phase 1). Their input usually needs to be integrated as early as the preliminary design stage.

Can I commission individual phases only?

Question: Can I commission just individual phases, for example only the building permit application?

Answer: In principle, yes. Keep in mind, though, that the fee will probably differ from the one calculated for that phase under the HOAI. It starts with the need for an initial assessment: What kind of project is it? Where is it, and which building regulations apply (federal state and also municipality)? Is there a local development plan with building lines, boundaries, roof forms or other requirements, or does §34 BauGB apply? Is the site within or outside a built-up area? Is access to roads and utilities secured? Are there special local regulations such as a conservation statute, parking regulations, a tree protection ordinance or a playground bylaw? Which building class does the project fall into? Is the building itself a listed monument, or next to one? Has the design already been discussed with the authorities? Is there a proper design at all, or is it more of a preliminary design in terms of detail? Is the building sensibly placed on the site, are setback distances met, and is the intended use permitted there at all? Do the floor plans comply with building regulations? Are fire safety requirements met (materials, escape routes, fire brigade access areas)? Were specialist consultants involved and their input properly integrated? Do other consultants or checking engineers need to be brought in, for example for fire safety or structural design?

By submitting the building permit application, an architect takes responsibility for the design, whether they created it themselves or someone else did. So an architect should check someone else's design very thoroughly. Often the drawings also need to be redrawn, for example because the design only exists as a sketch. At the very least, information needs to be added or unnecessary details removed. We therefore strongly recommend commissioning the same architect for at least service phases 1–4, so the design can be developed consistently and cost-effectively.

Sometimes phases 5–8 are then awarded to firms that specialize in detailed design, tendering, contract award and construction management. However, this is only likely to be cost-effective for larger projects. If a consistent design from the first concept to the finished building matters to you, it's best to find an architect who can offer all phases. That architect may well bring in specialized external support (often for tendering or construction management, for example). But the commissioned architect remains responsible and is usually still closely involved, for example through regular site visits focused mainly on design, while the site manager handles day-to-day coordination and checks contractors' invoices.

Construction costs as the basis for fees: a conflict of interest?

Question: Doesn't an architect have an interest in building as expensively as possible, so their fee goes up?

Answer: The logic of the HOAI suggests this, but there are a few things to keep in mind. Under the HOAI, the fee is based on the cost calculation made at the design stage. At this point, materials and finishes are already being selected, so the level of fittings is reflected in the calculation to some extent. But it's still an estimate with some uncertainty. The cost calculation may be about 15% off in either direction. This means individual decisions the clients make about fittings at the design stage can't be priced exactly, and they don't make a difference to the fee.

In particular, choosing a more expensive tile later on doesn't usually increase the fee (unless the contract says otherwise). The exception is when the expensive tile has different properties that require design changes, or when it's more complex to install and needs more supervision. Higher construction costs often do mean more work in design or site supervision, for example for special constructions. Whether construction costs always reflect the design effort isn't always clear, and it can't be predicted precisely at the time of the cost calculation anyway.

What does have a big impact on construction costs is the choice of construction method and structural system, the building services, windows and façades, and whether there's a basement. A committed, client-focused architect will always advise clients on the pros, cons and costs of each decision. The final decision is then up to the client.