ᐅ Terminating an Architect’s Contract Due to Slow Planning?

Created on: 18 May 2020 08:32
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MaxLumoc
M
MaxLumoc
18 May 2020 08:32
Hello!

Since January, we have been working on renovating a townhouse. In November, before buying, we hired an architect as an assessor. He made a good impression, so in December we asked if he could also manage the renovation including the attic conversion. In early January, he visited the property for an energy consultation, and we signed the contract. To keep the construction process as stress-free as possible, we commissioned him for phases 1 to 8 of the service phases (LPH1-8).

I had already informed him during the assessment and when requesting an offer that our desired move-in date was in August, our budget was €100,000 (approximately $105,000) for the renovation plus €20,000 (approximately $21,000) for construction supervision, and that we wanted to start planning in January and begin initial work (gutting) in February.

He pointed out that the schedule was very tight since contractors were very busy and unexpected issues always arise, so he did not want to commit to a move-in date.

Unfortunately, we were very naive about everything.

Now the first breach of trust: When the energy consultation report was completed in mid-January, we asked for a meeting to start planning. He was only available in mid-February due to two weeks of vacation before that—despite our tight schedule, he did not inform us about his vacation in advance.

The meeting after his vacation went well, and there were some legal issues (homeowners’ association) that needed clarification. During this period, we also decided not to replace the roof covering to save time and costs.

In mid-March, I first mentioned that the planning progress was too slow. The only progress in two months was applying for KfW funding. At the end of March, we finally received the documents for phases 1 and 2—(faulty) as-built floor plans, attic conversion floor plans, and elevations.

He still did not provide us with a timeline.

Then came another major loss of trust. He refused to support collaboration with a planner by sharing his plans. We understood that sharing original source files is acceptable, but the way he declined was quite blunt. I complained during a phone call and also mentioned the lost time and lack of a schedule again. After this, he provided a rough timeline.

This was initially followed, with phase 3 completed a week later and phase 4 a week after that.

During this time, there was another breach of trust. He had always led us to believe that individual contracts could be cancelled flexibly later, for example, if we planned to replace the roof but then did not, the construction supervision fee (phase 8) would be waived. We actually wanted to remove some parts already in phase 3 since we expected not to have the time or budget, but the architect persuaded us to keep them in the plan for now because we could still remove them in phase 7. Only after phase 3 acceptance did he clearly inform us that his fees were fixed from then on, regardless of whether we proceeded with the work or not.

As mentioned, we were naive but did not argue much because we wanted to move forward. At least we now had a timeline aiming to issue contracts by the end of May.

However, phase 5 was again delayed by a week and was rather limited in scope: a stack of drawings—for the attic conversion (stairs, ceiling/floor construction) and some details on window installation and basement ceiling insulation as well as radiator locations. After some corrections, we approved the results with the caveat that any missing details would be provided later.

What was completely missing: structural engineer involvement. The architect took measurements at the end of March but only sent them to the engineer at the end of April. The engineer now requested a preliminary joint meeting, but the architect is only available at the end of May (two weeks after the request)—shouldn’t the structural calculations have been done for phase 5?

For us, this is the last straw. After almost five months of planning for nothing extraordinary, it is still unclear when the first construction work will start! We have now set a timeline that the architect has agreed to follow. We also imposed some strict conditions (that he must not charge for measures we do not want from phase 5 onward and that we will withhold payment for phase 5 until phase 6 is complete).

We have not received a response yet, but we wonder whether these constant delays and his refusal to provide and adhere to a proper schedule are sufficient grounds to terminate the contract for cause. Especially since almost five months have passed without any work starting on the house.

We are emotionally exhausted as every further delay costs us a lot of money, and we keep searching for ways to make some progress. So now we have the stress we wanted to avoid, face major delays, and still have to pay almost €30,000 (approximately $31,500) in fees on a budget of €100,000 (approximately $105,000).

Thank you for reading, and we would greatly appreciate any advice on how to proceed.
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HilfeHilfe
19 May 2020 06:10
You have completed 5 out of 8 steps. Forcing a change at this stage is like suicide. Financial hardship during an essential renovation is always a poor advisor.
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MaxLumoc
19 May 2020 09:27
Thank you for your response. Until recently, that would have been my preferred option as well, but based on how things have gone so far, we have serious doubts that he will complete the next phases promptly. There will be delays here and there—one week in one place, another week elsewhere. The submission will lead to questions, which he will use as reasons for further delays. In the end, contracts will only be awarded in two months, and we simply do not have that amount of time.

We will now start contacting tradespeople ourselves and awarding contracts. Regarding work phase 8 (LPH8), we will have to see whether it's still possible to cooperate with the architect or if we need to find a new energy consultant to oversee and approve the KfW-related part, and whether perhaps the structural engineer can approve the portions related to structural engineering.

Therefore, the question is: If we cannot reach an agreement with the architect (and it looks like that, as we have had similar discussions several times already, and now he is delaying us again while demanding payment for work phase 5 (LPH5)), what are the chances that we can come out of this with minimal losses, meaning we would not have to pay the architect for work phases 6 to 8 (LPH6-8)?
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HilfeHilfe
19 May 2020 10:53
MaxLumoc schrieb:

Thank you for the response. Not long ago, that would have been my preferred approach as well, but based on how things have progressed so far, we have serious doubts that he will complete the next phases promptly. There will be delays here and there, each lasting about a week. The submission will lead to questions, which he will then use as reasons for further delays. In the end, contracts will only be awarded in two months, and we simply don’t have that time.

We will now start contacting tradespeople and awarding contracts ourselves. For phase 8 (LPH8), we will have to see whether we can still work with the architect or whether we need to find a new energy consultant to monitor and approve the KfW-related part, and whether perhaps the structural engineer can approve the elements related to the structural design.

Therefore, the question: If we cannot reach an agreement with the architect anymore (and it looks that way—we have had similar discussions several times already, and now he is stalling again while demanding payment for phase 5 (LPH5)), what are the chances that we can come out of this with minimal losses, meaning not having to pay the architect for phases 6 to 8 (LPH6-8)?

That’s what your lawyer can tell you.

I also find your approach questionable—simply moving forward in parallel without terminating or formally complaining to the architect in some way.
kaho67419 May 2020 11:03
In the end, your architect uses all the legal leverage he has, and you let him walk all over you. I am not a lawyer, so it’s best to consult one.
If it were my project, I would stop all payments, evaluate the work done so far, set aside reserves accordingly, and complete the project without him. Advantage: now he has to chase you for payment, or he won’t see any more money. You do your thing, and he can struggle to keep up.
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MaxLumoc
19 May 2020 12:25
@kaho674: That is exactly our plan; hopefully, it will be good enough.

@HilfeHilfe: Over the past few months, we have told the architect at least four times that we are unhappy with the progress and that he gave us poor advice. Twice the tone was more assertive. What we missed was officially notifying him of a delay during his vacation. In our latest email, we issued a formal reminder. He requested a ten-day period to review the situation and at the same time sent his invoice with a ten-day payment deadline...

This deadline could cause the appointment with the structural engineer to be missed, and whether we reach an agreement or not, it will further delay the overall progress.