Working as an architect-builder

Architects working as a builder-developer

Many architects have built projects they have designed or have considered doing so. When contemplating building their own designs, architects should consider the decision carefully and take into account all aspects of the project and consider the following questions:

• Do you have the necessary competence, qualifications and building experience?
• Is it in your client's best interest?
• Are you a registered builder?
• Is it legal?
• Is it acceptable under the relevant architect act?
• Can you afford the risks?
• Were your original estimates realistic?
• Have you relinquished your agency role with your client?

Architects may build, or be attracted to build, projects they have designed for a variety of reasons, including:

• building their own design requires less documentation and allows design to continue during construction
• increasing the architect's income by extending the services provided
• removing some of the challenges of dealing with builders
• being seen as a way of completing a project within the budget, perhaps as a response to unacceptably high tenders
• being seen as a way to reduce or avoid variations.

However, when architects become involved in building, they might fail to fully appreciate the risks associated with the building process. Furthermore, architects must recognise that their role as agent of the client ceases once they become the builder.

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Building work – requirements

Architects who provide services other than contract administration during the construction stage of a project, may need a builder's licence to do so. Activities which may require a building licence under state laws include engaging and supervising trades, construction management and project management.

If an architect does not obtain a licence when required to do so under relevant laws or local authorities' requirements, they risk being penalised for breaching the law.

In most states, the law requires anyone undertaking building work to be registered. Accordingly, before starting work:

• check local requirements
• obtain professional advice (particularly legal advice)
• ensure compliance with the relevant requirements.

Registration with a licence usually also applies to owner-builders. It is, therefore, recommended that architects advise their clients of registration and licence requirements, as necessary.

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Ethical ways to be an architect-builder

Generally, there are two ways for an architect, who is trained to do so, to ethically offer building construction services:

1. Construction management services on a consultant basis, as an extension of the architectural commission. Professional construction management enables the architect to extend the commission into the actual construction process and, potentially offers an advantage to clients by combining the design and building roles.
2. Design-and-construct service as a builder, avoiding the use of the word architect except (where appropriate) in terms that identify the architect as an employee of the builder.

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Risks of being an architect-builder

Assuming that the ethical and legal conflicts can be resolved, it is important to recognise that building, as a business activity, has its own risks and difficulties. Architects are trained not to build but to design and, unless the architect has building skills and experience, becoming a builder can present significant risks. Some of these include:

• Bankruptcy
• Consumer-protection legislation – complaints against architects who become builders, relate to the practice of establishing a building-delivery process, where the construction risk is borne by the client. This clearly raises some serious ethical and legal questions for architects. In most states and territories, consumer-protection legislation provides protection for owners against open-ended building contracts. Most architects’ acts include restrictions on the capacity of architects to act as builders.
• Defective work – In many jurisdictions, legislation requires builders to provide warranties for extended periods. This means that if you, as the builder, fail to satisfactorily rectify a defect during the warranty period, the guarantor will pay for the rectification and seek to recover the cost from you.
• Delays – As a small operator, subcontractors may give your project a low priority.
• Errors and damage – Replacing damaged or incorrectly cut materials.
• Litigation costs – Getting the last cheque out of a difficult client can be costly. Sometimes, due to the cost of litigation, it can be preferable to pay a complainant if sued, rather than mount a legal defence, even if one is justified.
• Obtaining competitive prices – It takes time and experience to build up a list of reliable subcontractors and suppliers who know you, know how you work and become confident in being paid, before you are likely to obtain the best price for the work.
• Under-quoting – Misjudging the cost and quantities of materials, fittings or subcontract parts of the work. Failing to allow for financing or overdraft costs. Forgetting to allow for associated costs such as tip fees, scaffold hire, authority approval and inspection fees or cartage costs.

Some of the methods used to avoid construction risks include:

• construction management, where the owner contracts with several subcontractors and pays each separately
• subcontracting the whole of the work to a builder and adding a margin to the progress claims
• acting as a developer, with interlocking contracts which push the risks back to the owner

Construction management is a common arrangement, however, where the architect is not a registered builder, it requires the owner to obtain an owner-builder permit. In most states and territories this deprives the owner of the protection and benefits of housing guarantee and other consumer-protection legislation. All of these methods are likely to contravene domestic-building legislation and/or architects acts.

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