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8 Important Points for a Design Contract

by Don Vandervort, © HomeTips

When working with an architect or designer to develop a plan for your home remodel, it’s very important to have a written agreement. Following are eight topics to discuss in the interview phase and have included in the design contract:

1) Who is involved? Names, addresses, phone numbers, and all contact information for both you and the designer.

2) Scope of work. Describe the overall project—the rooms involved and what will be done to them—including as much detail as possible.

3) Form of payment. There are four main options for paying a designer: hourly, flat fee, cost-plus, and commission. With a full-scale remodel, most designers work either hourly or for a flat fee. Hourly designer fees vary widely by region and the experience of the designer, running anywhere from $75 per hour to $250 per hour or more. If you choose this route, make sure an estimate of the time required for each and every task is specified. A flat fee—usually a percentage of the project’s final cost—is a safe route to go if the project is relatively complex. Make sure the contract specifies what is included in that fee, for example, a complete design plan, oversight of the subcontractors, purchasing of product, etc.

Cost-plus and commission fees are common for projects that involve revamping interior spaces where a variety of new fixtures, cabinets, and surfaces will be purchased. With both, the designer’s fee comes from taking a percentage of the money spent on these products. In a cost-plus arrangement, the designer buys products at a “trade” discount and then marks them up to retail price to make his or her design fee. With commission fees, you agree on a set commission—generally 25% to 30%—on what is purchased. A big downside to these arrangements is that the designer has no incentive to keep the costs down—on the contrary, the more you spend, the more they make. If you choose a cost-plus or commission arrangement, make sure the contract details the trade cost and the markup of each item.

3) Start and completion dates for the design work. If you think it might be necessary or helpful, consider including an incentive bonus for completing the work early and/or a penalty for finishing it late.

4) Work description. An itemized list of the services to be rendered and the deliverables. Describe the anticipated design process, including submission of preliminary conceptual drawings, approval meetings, design refinements, and final working drawings. Will the designer submit drawings to the building department and then work through any required changes? How many sets of working drawings will be provided?

5) Design control. Specify how the decision-making process for selecting products and materials will happen. Be sure you maintain the level of decision-making control that you’re going to want by specifying the approval process.

6) Payment schedule. Most designers provide an initial free, on-site consultation. Then, upon beginning work, they may bill you regularly for hours spent or according to a schedule of completion. Don’t let your payments get ahead of the work that has been done.

If an architect or designer will be involved in overseeing the project from start to finish, it is not uncommon for them to receive 30% upon completion of the design plan, another 50% when all products have been purchased and installed, and then a final 20% when the project is completed in entirety, including all the finishing touches such as painting and trim.

7) Insurance. Unlike professional contractors who are bonded, designers are not required to carry insurance to guarantee their work. But it is very helpful if they have it. Ask whether your chosen designer carries errors-and-omissions insurance to cover problems such as giving bad advice or failing to comply with local building codes, for example. Have a copy of the designer’s proof of insurance included with the contract.

8) Dispute arbitration. If big problems arise between you and your designer, how will they be handled? Lawsuits can be very expensive. You may want to stipulate that any dispute will go to arbitration.

To get free recommendations for top-rated local architects, call the most reliable and comprehensive referral service, HomeAdvisor, at 866-350-2983 (toll free).

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