September 12, 2022

HOAI and how to ensure you’re not being taken advantage of

The traditional bilateral contracting model between the owners, architects, and individual contractors remains common in the construction industry, especially for smaller and mid-sized construction projects. A significant move away from this will not likely be on the horizon for quite some time. As a result, the specialist knowledge of the construction companies only comes into play after the contract is awarded and construction has begun, and usually only after essential planning and design have been completed. In many cases, this goes hand in hand with higher planning, higher execution costs, and deadline uncertainties.

The architectural law determines the rights and obligations of the architect to his client and third parties. The structure of an architectural contract is primarily based on the German Civil Code (BGB). The fees that cover the work are based on the Honorarium Code for architects and engineers (HOAI). Professional rights are regulated primarily by the architects’ laws and by the statutes and directives of the Chamber of Architects.

Drafting the Contract

When assessing, or creating a typical architectural contract, an exact comparison of the construction and planning tasks is necessary.

A professional, individual case-oriented contract arrangement prevents any later dispute over an architect’s performance or possible fee issues related to the honorarium code for architects and engineers (HOAI).

  • The accurate application of the “HOAI” is part of particular significance for the enforcement of architects’ and engineers’ claims to remuneration. The correct deal design and the faultless preparation of invoices according to “HOAI” principles are decisive in that context.
  • From the perspective of the builder-owner, the focus is on the design of the contracts with architects, specialist engineers, and project managers necessary for realizing the project. Information on the safe handling of the “HOAI,” the public procurement law, and the “VOB/B” will optimize construction mechanisms, thus concerning day-to-day activities on the construction site.

The construction contracts law determines the contractual relationships between the investor and the contractor for the production and execution of a service in the construction industry. The regulations of a construction contract normally regulate:  

  • the scope of services,
  • purchases, and
  • issues related to the liability and guarantee of a construction.

The general contractor’s agreement provides that the general contractor commits to the developers to render the complete construction services as you have envisioned it in your drafting plans or carry out essential parts of the construction work.

This is often not done by the general contractor but by subcontractors.

The construction contract must be designed as a contract of work, as the construction of the building will be considered the final work. The rights and obligations derive from BGB (German Civil Code). Building Contracts Law is fundamental, as the legal basis is insufficient and individualized regulation is often necessary the German VOB (Construction Tendering and Contract Regulations) is generally insufficient.