Architect plans way over budget

Aliwag

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We engaged an architect to design an extension to our semi-d., to include a two-storey side extension and a rear ground floor extension and a garden room for working from home.

We set an initial budget of 275k all in. After the initial consultation the architect sent us a fee proposal and estimated the cost of the project would be 300k ex VAT and fees. We agreed to borrow 100K from a family member and increased our budget to 375k all in.

Architect designed beautiful plans, in many ways much nicer than we had expected (e.g. bedrooms larger, open-plan space very large, downstairs bathroom huge, walk-in wardrobe included etc.), we were delighted, went through some small changes (moving doorways, swapping utility and bathroom, etc.). The only thing we added was an extra 4.5 sq meter extension at the front of the house, which they estimated would cost 10-15k.

We were ready to progress to the next stage of the process - planning - when the architect told us the current plans are going to cost 400k ex VAT and fees and this doesn't include the garden room, which will be another 50k ex VAT and fees. So, well over 500k total. We don't have this money. We discussed by phone and they're saying we'll have to lose a bedroom to get under budget but we need that bedroom, it's one of the main reasons for doing the extension.

They've now billed us for the work to date. What should we do? Are we within our rights to ask them to go back to the drawing board and design something we can afford?
 
Budget should be flexible with 10/20% either way and s/he should work within the selected budget.however prices of supply has shot up so s/he would need too recheck the prices given.
 
Are we within our rights to ask them to go back to the drawing board and design something we can afford?

Yes... but you'll pay them for the service.

You do realise that everything building related has gone up massively price wise?

You are lucky that you haven't started building. Imagine the mess you'd be in. If you want to progress, you'll have to revise your expectations (downwards).

To me, it looks as if you were at the pin of your collar with the budget you had when you had to borrow an additional €100k from a family member.

Re. the garden room... there are lots of temporary, cheaper alternatives out there.

e.g. https://www.donedeal.ie/gardenfurniture-for-sale/log-cabin/31669059

.... comes in at €5,500 plus VAT (no affiliation with company)

More by the same company here => https://www.donedeal.ie/all?userId=4198598

There are lots of other companies out there that do similar. No need to break the bank for the garden room/office.

If you keep below a certain square meterage, you'll not need planning for it.

I'd be focussing my main budget on the house... cut your cloth to the new measurements.
 
This is a tricky one, and much will depend on the wording of the contract between you.

We discussed by phone and they're saying we'll have to lose a bedroom to get under budget but we need that bedroom, it's one of the main reasons for doing the extension.

As others have mentioned, materials and construction prices are rising quickly, it sounds like there is a potential conflict between what you want and what the budget allows. If you outlined a minimum set of requirements for the work, then this would generally trump the budgetary constraint.
 
An extortionate price. Personally I’d wait. There has to be another way. Tying into this level of debt for an extension is madness. What interest will you pay on top ? Don’t rush into this. Take your time and get a few different quotes. I know someone who did a huge extension under two years ago for under 200k. And even that looked too much money at the time. Are you sure you want to stay there ? Would it make more sense to move ?
 
Hi Aliwag,

Welcome to AAM.

Maybe the whole thing is another Daniel O'Donnell/Dermot Bannon situation :)

In days of old Dermot Bannon constantly went way over budget and the people mainly just borrowed more to suit that situation. In the more recent episodes of Room to Improve he seems to have got the message that he needs to curtail his spending on their behalf.

Looks as if there is an element of this to your plans but also Covid increases are most likely playing a big part too.
 
Is the architect employing a quantity surveyor and/or is it his builder who is doing the job ? No disrespect to QAs but they do come up with some vast estimates.
 
An extortionate price. Personally I’d wait. There has to be another way. Tying into this level of debt for an extension is madness. What interest will you pay on top ? Don’t rush into this. Take your time and get a few different quotes. I know someone who did a huge extension under two years ago for under 200k. And even that looked too much money at the time. Are you sure you want to stay there ? Would it make more sense to move ?
clearly wasnt too much money with the benefit of hindsight ;)
 
Hi all. Thanks for the replies. I want to clarify a few points.

The architect's estimate of 300k ex VAT was from late March. We made it clear at that point that our max budget was 375 incl VAT and fees. Then they did the plans (which included things we hadn't asked for like double bedrooms where we had only asked for single, a full bath downstairs where we had asked for a cloak room, a walk-in wardrobe that wasn't on our list of requirements) and we had a couple of rounds of moving doors, discussing window types and kitchen position etc. Then in late June (3 months after the estimate of 300k) they told us that they estimate the build cost to be 450 ex VAT. I know prices are going up but not by 50% every 3 months.

We are not to the pin of our collar. Our hope was to do the whole thing without borrowing. When we were discussing topping up our mortgage to get to 375k (300k ex VAT), a relative offered to loan us money instead. We also have other non-house savings. The thing is it doesn't make sense from a financial perspective to pump 500k into this house - we'd lose 300k+ if we were to sell. Now, I understand that there is a loss when you renovate but this is too much of a loss for us to feel comfortable about it.

We haven't signed a contract. The architect kept forgetting to bring it to our meetings.

We can't really wait. We need the extra bedrooms ASAP. If we can't make this house work, we'll move but we love the location and the community and our kids are friends with all the neighbour kids so it would be a big loss.

Architect is not employing a QS but has suggested that we get one. We are reluctant to spend the money on a QS when it seems there is no chance of us proceeding with these plans. We'd rather the architect designed plans that are closer to our budget and then we'll get costings from a QS.

Yes... but you'll pay them for the service.
Do you think we should pay full price for plans that are completely outside our budget and that we can't use? I'm not being sarcastic and I have never not paid for a service in my life but I can't help feeling that we've been had. They knew our budget and designed something twice what we originally wanted to spend and 1.5 times the budget we'd agreed a couple of months previously.
 
Do you think we should pay full price for plans that are completely outside our budget and that we can't use? I'm not being sarcastic and I have never not paid for a service in my life but I can't help feeling that we've been had. They knew our budget and designed something twice what we originally wanted to spend and 1.5 times the budget we'd agreed a couple of months previously.
Well they did as requested by producing the original and you said yourself you were delighted and asked for a jig around. Unfortunately prices have rocketed. As regards payment, negotiate negotiate negotiate.
 
When we renovated a house in 2010 we had a similar problem - the architect was fully aware of the budget but drew up plans which he said would be on budget. We applied for and got planning permission.

Then we got the plans costed and the cost was 33% above our budget. He had assumed that we would find financing for the overrun.

We said no way and had him draw up a revised set - reapplied for planning, renovated and came in on budget but 6 months later than we had hoped for initially

Admittedly, the first lot included a lot of stuff we had not asked for but we accepted his assurance that it could be done for the budget we had - Ha! Ha!

He didn;t gt any extra for drawing up the 2nd set of plans as it had been quite clear that our budget was fixed and not to be exceeded
 
Well they did as requested by producing the original and you said yourself you were delighted and asked for a jig around. Unfortunately prices have rocketed. As regards payment, negotiate negotiate negotiate.
The plans were presented to us as if they were within our budget. So yes, we were delighted to think that we could afford all double bedrooms, a walk in wardrobe etc etc. But we can’t (as we had originally expected) so now we have plans we can’t use.
 
Do you think we should pay full price for plans that are completely outside our budget and that we can't use? I'm not being sarcastic and I have never not paid for a service in my life but I can't help feeling that we've been had. They knew our budget and designed something twice what we originally wanted to spend and 1.5 times the budget we'd agreed a couple of months previously.

Your follow up posts have presented more clarity.

I certainly would not be paying for a service that went over a max budget, which had been clearly told to them.

I'd be asking them to do as agreed... produce a plan that can be fulfilled within budget.

And I certainly wouldn't be signing any architect's contract that bound me to their 'run away' plans.
 
OP,

As far as I can see you have a verbal agreement with an architect that you would pay him for the delivery of specific designs. He has failed to deliver designs in line with your specifications. On a personal level, a number of years ago, an architect verbally agreed to source a builder and supervise work for me - again, he somehow always managed to forget to bring a written contract. Anyway, he employed a complete cowboy and badly supervised his work. Why should one pay for a service that's useless? I took the trouble of explaining to him all his performance deficits.......I don't think he fully appreciated the candour of my feedback! It was the only time ever that I refused to pay for a service.
 
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Don't bother asking if you don't want to but what are the Architect's fees for his design, etc and how has he priced his fee?
 
Don't bother asking if you don't want to but what are the Architect's fees for his design, etc and how has he priced his fee?
They’re looking for 5k right now. The total estimated fee is a little over €20k plus VAT. The fee is calculated as a percentage of the build cost but it’s paid in stages (25% for design, 15% for planning, 30% for tender, 30% for build).
 
Any building project will be very stressful.

If you don't have confidence in your architect, it will be even more stressful.

You should sit down with him and tease it out.

If you are not perfectly happy, then walk away. It's messy and it will delay things, but overall, it will save you a lot of stress.

Brendan
 
They’re looking for 5k right now. The total estimated fee is a little over €20k plus VAT. The fee is calculated as a percentage of the build cost but it’s paid in stages (25% for design, 15% for planning, 30% for tender, 30% for build).
Thank you. The price he charged is not excessive, obviously doing a lot more than just the design. Maybe a bit of leeway there but not much I would say.
JPD on post No 11 has some good points in his post, but they may not be relevant in your case as it seems you had no contract. You'll have to cut out some things and the garden room looks like it could be a good place to start.
 
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