Instructions: B109™ – 2020, Standard Form of Agreement Between Owner and Architect for Multi-Family Residential or Mixed Use Residential Project

 B109™ – 2020, Standard Form of Agreement Between Owner and Architect for Multi-Family Residential or Mixed Use Residential Project

Synopsis.

AIA Document B109–2020 is a standard form of agreement between owner and architect for building design and construction contract administration for a multi-family residential or mixed use residential project. B109–2020 contains terms and conditions that are unique to these types of projects. B109–2020 is a one-part document that is based on AIA Document B103™–2017, Standard Form of Agreement Between Owner and Architect for a Large or Complex Project. AIA Document B109–2020 uses the traditional division of services into basic and supplemental/additional services and includes an article with a pre-design services scope of services, which was added in 2010. The pre-design services begin before the traditional basic services and include assessment of project feasibility, layout, and regulatory requirements. Following pre-design services, basic services are based on five traditional phases: schematic design, design development, construction documents, bidding or negotiation, and construction. This document may be used with a variety of compensation methods, including percentage of construction cost and stipulated sum. 

B109–2020 is not intended for use on residential projects that will include a residential condominium unless specifically set forth in the initial information. Otherwise, B109–2020 includes a representation by the owner that the project will not include a residential condominium. If B109–2020 is used for residential condominium projects, users should review and consider modifications. AIA Document B509™–2020, Condominium Projects Guide which includes a discussion of potential risks that may be inherent in residential condominium construction and offers model language for inclusion in B109–2020 to better allocate these risks

In B109–2020 the architect does not prepare cost estimates, but agrees to design the project to meet the owner’s budget for the cost of the work at the conclusion of the design development phase services. B109–2020 assumes that the owner will retain third parties to provide cost estimates and project schedules, and may implement fast-track, phased or accelerated scheduling. If the architect will provide cost estimates and will design the project to meet the owner’s budget for the cost of the work at the conclusion of the construction documents phase services, the parties should consider using AIA Document B101™–2017, Standard Form of Agreement Between Owner and Architect. For all document details and a record of changes, see the summary  »

 

Using B109-2020.

Cover Page

Date. the date represents the date the agreement becomes effective. it may be the date the agreement was originally submitted to the other party, the date authorizing action was taken, or the date of actual execution. professional services should not be performed prior to the effective date of the agreement. 

Parties. Parties to this agreement should be identified using the full legal name under which the agreement is to be executed, including a designation of the legal status of both parties (sole proprietorship, partnership, joint venture, unincorporated association, limited partnership or corporation [general, limited liability, close or professional], etc.). where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.

Project. The proposed project should be described in sufficient detail to identify the prototype(s) to be designed by the architect, including (1) the official name or title of the facility; (2) the location of the site, if known; (3) the proposed building usage; and (4) the size, capacity or scope of the project, if known.

 

Article 1 – Initial Information

§ 1.1 Initial informationI is provided in Section 1.1. The parties should take care to be as explicit and detailed as possible with respect to the relevant Initial Information.

§ 1.1.4 Identify sources of public funding for the project, if any.

§ 1.1.5 The parties must set forth the owner’s anticipated design and construction schedule, including design phase milestone dates, as those dates are to be incorporated into the architect’s initial schedule for the architect’s services. 

§ 1.1.8 Identify and describe the owner’s sustainable objective for the project, if any.

§ 1.1.14 The parties should complete the table contained in Section 1.1.14 prior to executing the agreement. For each consultant listed, the parties should indicate the party responsible for providing the service in the appropriate column.

 

Article 5 – Supplemental and Additional Services

§ 5.1 The parties should complete the table contained in Section 5.1 prior to executing the agreement. For each service listed, the parties should indicate the party responsible for providing the service in the appropriate column. The architect is not responsible for any listed service unless specifically so designated in the responsibility column of the table.

§ 5.1.2.1 For each supplemental service designated the responsibility of the architect in the table in Section 5.1, insert a description of the architect’s supplemental service. Describe in detail the architect’s supplemental services or, if not further described, set forth in an exhibit, identify the exhibit. The AIA publishes a number of standard forms documents for architect’s services that can be included as an exhibit to describe supplemental services.

§ 5.1.2.2 For each supplemental service designated the responsibility of the owner in the table in Section 5.1, insert a description of the owner’s supplemental service. Describe in detail the owner’s supplemental services or, if not further described, set forth in an exhibit, identify the exhibit.

§ 5.2.3 Insert an agreed-upon number in each of the spaces provided.

§ 5.2.5 Insert the number of months beyond which the architect shall be entitled to compensation as additional services.

 

Article 8 – Copyrights and Licenses

In B109–2020, as in B103–2017, the owner receives a license to use the instruments of service solely and exclusively for constructing, using, maintaining, altering, and adding to the project. This license will only terminate if the architect rightfully terminates the agreement for cause due to the owner’s default. In the absence of such a termination by the architect, the owner retains the license to use the instruments of service after completion of the project or the owner’s termination of the agreement. If the owner subsequently uses the instruments of services without retaining the author of the instruments of service, the owner agrees to release and indemnify the architect for such uses. If the owner rightfully terminates the agreement for cause, however, the owner is not required to release and indemnify the architect for its further use of the instruments of service. If the owner terminates the agreement for its convenience, or the architect terminates the agreement due to the owner’s suspension of the project, B109 provides at Section 10.7.2 for the owner to pay a licensing fee to the architect for the owner’s continued use of the architect’s instruments of service. 

 

Article 9 – Claims and Disputes

§ 9.1.3 AIA Document B109–2020 contains a provision at Section 9.1.3 requiring the architect to indemnify the owner from claims made by third parties to the extent they are caused by negligent acts or omissions of the architect. The duty to indemnify is limited to the lesser of the stated amount of the professional liability insurance coverage required of the architect under this agreement or the amount stated in Section 9.1.6. 

§ 9.1.6 Insert an agreed-upon maximum amount or other necessary terms and conditions for limiting the architect’s aggregate liability under the agreement.

§ 9.2.4 Select from three choices of binding dispute resolution: (1) arbitration, (2) litigation, or (3) another method that the parties must identify. Other types of dispute resolution include a dispute resolution board or a mini-trial. For additional information about other methods of dispute resolution, refer to The Construction Industry’s Guide to Dispute Avoidance and Resolution or visit adr.org for more information.

 

Article 10 – Termination or Suspension

§ 10.7.1 Insert the amount of any termination fee, or the method for determining any termination fee.

§ 10.7.2 Insert the amount of any licensing fee, or the method for determining any licensing fee. 

 

Article 12 – Compensation

There are at least ten methods of computing compensation for architectural services. Four of these methods are time-based, reflecting in different ways the time spent by the architect on the project:

Multiple of Direct Salary Expense, in which direct salaries of designated personnel are multiplied by a factor representing benefits, overhead, and profit.

Multiple of Direct Personnel Expense, in which the salaries plus benefits of designated personnel are multiplied by a factor representing overhead and profit.

Professional Fee Plus Expenses, in which the salaries, benefits and overhead of designated personnel are the expense and the fee may be a multiplier, percentage or lump sum representing profit.

Hourly Billing Rates, in which salaries, benefits, overhead, and profit are included in the rate for designated personnel.

Other methods, while they may be indirectly related to time expended on the project, do not use time as a factor in the calculation:

Stipulated Sum, in which compensation is listed as a dollar amount.

Percentage of Cost of the Work, in which compensation is calculated by applying an assumed percentage to the estimated or actual cost of the work, whichever is most certain at the time the calculation is made.

Multiple of Consultants’ Billing, in which consultants’ bills are multiplied by a factor representing the architect’s administrative costs, overhead, and profit.

Square Footage, in which the square footage of the structure is multiplied by a pricing factor.

Unit Cost, in which the number of certain units such as rooms, acres, etc., is multiplied by a pricing factor.

Royalty, in which compensation is a share in the owner’s income or profit derived from the built facility.

The AIA makes no recommendation as to the appropriateness of any of these methods of compensation on a particular project; nor does the AIA suggest that the foregoing list includes all methods that are possible, practical or in actual use. The use of any of the compensation methods described above, singly or in combination with other methods, is a business decision for the architect and the owner. Further, the AIA makes no recommendations and has no guidelines or schedules that specify the amount of compensation an architect should be paid.

§ 12.1 Insert the basis of compensation for the architect’s pre-design services. Sample language is provided below for several of the most widely used methods of compensation. 

If a Multiple of Direct Salary Expense is used, include multipliers using words and numerals in the following insert: 

Compensation for services rendered by principals and employees shall be based on a multiple of ________ (__) times Direct Salary Expense, which shall be defined as the direct salaries of the Architect’s personnel engaged on the Project excluding any costs of mandatory or customary contributions and benefits. Compensation for services rendered by consultants shall be based on a multiple of ________ (__) times the amounts billed by consultants.

If a Multiple of Direct Personnel Expense is used, include multipliers using words and numerals in the following insert:

Compensation for services rendered by principals and employees shall be based on a multiple of ________ (__) times Direct Personnel Expense. Compensation for services rendered by consultants shall be based on a multiple of ________ (__) times the amounts billed by consultants.

If a Professional Fee Plus Expenses is to be used, include the dollar figure and the appropriate multipliers (using words and numerals) in the following insert: 

Compensation shall be a Fixed Fee of ________ ($__) plus a multiple of ________ (__) times Direct Personnel Expense. Compensation for services rendered by consultants shall be based on a multiple of ________ (__) times the amounts billed by consultants.

Alternatively, the fee (representing profit) may be calculated as a multiplier or percentage.

If Hourly Billing Rates are used, include the cumulative amount for salary, benefits, overhead and profit to fix each rate using words and numerals in the following insert:

Compensation for services rendered by Principals and employees shall be based upon the hourly billing rates set forth below:

      1. Principals’ time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, the Principals are: (List Principals, such as owners, partners, corporate officers and participating associates.)
      2. Supervisory time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, supervisory personnel include: (List managerial personnel by name or job title, such as general manager, department head or project manager.)
      3. Technical Level I time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level I personnel include: (List those personnel by name or job title who are highly skilled specialists, such as job captains, senior designers, senior drafters, senior planners, senior specifiers or senior construction administrators.)
      4. Technical Level II time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level II personnel include: (List those personnel by name or job title who hold intermediate-level positions relative to Technical Level I, such as professionals awaiting licensure and managers of clerical staff.)
      5. Technical Level III and clerical personnel time at the fixed rate of ________ ($__) per hour. For the purposes of this Agreement, Technical Level III and clerical personnel include: (List those personnel by name or job title who occupy junior-level positions, such as word processor or office assistant.)
      6. Compensation for services rendered by consultants shall be based on a multiple of ________ (__) times the amounts billed by consultants. 

If a Percentage of Cost of the Work is to be used, insert the following: 

Compensation shall be ________ percent (__%) of the Cost of the Work, as defined in Section 7.1.

If a Stipulated Sum is to be used, insert the sum in words and numerals in the following sample language:

Compensation shall be a stipulated sum of ________ ($__). 

No sample language is provided for compensation based on square footage, unit cost or royalty. Parties choosing one or more of these methods should craft their own language based on the particulars of the project.

§ 12.1.1 See methods of compensation shown above for Section 12.1.

§ 12.2 See methods of compensation shown above for Section 12.1.

§ 12.3 See methods of compensation shown above for Section 12.1.

§ 12.4 See methods of compensation shown above for Section 12.1.

§ 12.5 See methods of compensation shown above for Section 12.1.

§ 12.6 See methods of compensation shown above for Section 12.1.

§ 12.7 See methods of compensation shown above for Section 12.1, if other than a percentage of the invoiced amount.

§ 12.11.2 Insert the percentage of the expenses incurred by the architect for which the architect will be reimbursed.

§ 12.12 Insert the additional coverages the architect is required to obtain in order to satisfy the requirements set forth in Section 2.6, and for which the owner shall reimburse the architect.

§ 12.13.1.1 Insert the agreed-upon amount of an initial payment, if any, that shall be made to the architect upon execution of the agreement.

§ 12.13.1.2 Insert the agreed-upon amount of an initial payment, if any, that shall be made to the architect upon execution of the agreement if the sustainability certification is part of the sustainable objection.

§ 12.13.2.1 Insert the number of days within which payment must be made before interest shall accrue.

 

Executing the agreement.

The persons executing AIA Document B109–2020 should indicate the capacity in which they are acting (i.e., president, secretary, partner, etc.) and the authority under which they are executing the Agreement. Where appropriate, a copy of the resolution authorizing the individual to act on behalf of the firm or entity should be attached.

 

Notes.

Modifications. Particularly with respect to professional or contractor licensing laws, building codes, taxes, monetary and interest charges, arbitration, indemnification, format and font size, AIA Contract Documents may require modification to comply with state or local laws. Users are encouraged to consult an attorney before completing or modifying a document.

Reproductions. This document is a copyrighted work and may not be reproduced or excerpted from without the express written permission of the AIA. There is no implied permission to reproduce this document, nor does membership in The American Institute of Architects confer any further rights to reproduce this document. For more information, see the document footer and the AIA Contract Documents® Terms of Service.

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