Practice Advisory Services (PAS) often hears from members of the public through the OAA’s Hotline regarding fee disputes where the architect has been billing the client on an hourly basis without an adequate contract framework. Hourly fees are generally charged for preliminary services, when it is difficult to determine a fixed fee and when the project is of short duration.

In one instance on a small residential project, PAS had a call from an architect and a client where the architect had worked for several months for the client on various options for the project. The architect worked on an hourly basis without regular billing. After receiving the architect’s accumulated invoice after many months of work, the client was in a state of shock. The relationship broke down, and a nasty dispute developed.

One problem was that through lack of communication, the architect did not review with the client the proposed work involved. The two parties did not share a common understanding, and there was no fee/contract framework. A second problem was the failure of the architect to invoice on a regular basis, which resulted in missed opportunities to keep the client updated. Further, in this particular instance, the client was busy with other matters, and had little time to review and sign off the work as it progressed.

A common theme in such disputes is lack of communication between the parties. Here are some suggestions as to how to avoid these disputes:

- Develop a common framework and vision for the project;
- Sign a standard OAA contract;
- Develop with the client a plan of communication activities through the project;
- Identify to the client the expected amount of effort involved on a step-by-step basis;
- Set upset fee limits for each step not to be exceeded without approval by the client;
- Bill the client regularly on an agreed bi-weekly or monthly basis, regularly issuing invoices;
- Communicate regularly with the client as to how the project is progressing relative to upset budgets—even though the client may be busy with other matters, stress to them the importance of reviewing and signing off the work as it progresses; and
- Manage the client’s expectations from the start, and keep them informed about changes to the schedule or effort required for each step.

For additional information on this topic, consult Chapter 5.3 – Communication Management in the Canadian Handbook of Practice. The RAIC - A Guide to Determining Appropriate Fees for the Services of an Architect (Electronic Format) is also be a good resource.

The OAA Hotline serves and supports Ontario Architects and Licensed Technologists OAA. It also provides building officials, clients, lawyers, and others support relating to the practice of architecture. This service is confidential and may be accessed by phone at 416-449-6898 x 400 or via email at PracticeAdvisor@OAA.on.ca. For additional information on the OAA’s hotline, click here.

Disclaimer: The OAA does not provide professional legal, accounting, or insurance advice, and expressly disclaims any responsibility for any errors or omissions with respect to discussions regarding same. Readers of OAA documents are advised to consult their own legal, accounting, or insurance representatives to obtain suitable professional advice in those regards.