Percentage fees are usually based on the current cost estimate, agreed with the client. As the job progresses, the current cost estimate can be updated at the end of each work stage. Then the updated cost can be applied to the percentage fees for the next work stage, by agreement with the client. When the tender prices are known, the fees can be based on the accepted tender, or the lowest compliant tender, for the post-tender work stages. This shares the risk of cost fluctuations and adjusts the fee to reflect any design or client changes.

At the end of the project, when the final construction cost has been ascertained, the fees for the complete project, or just for the post-tender stages, can be adjusted to a percentage of the actual final costs. This system works in the architect’s favour when building costs are rising or on-site variations and over-runs have increased the final construction costs. However, in these deflationary and cost-cutting times, the construction costs could end up lower than the earlier estimates, which would reduce the architect’s fees and profit.

In your case, for a project just up to the completion of RIBA work stage D (Detailed Planning Application), without the use of a QS, you will have to agree with your client an estimated construction cost on which to base your percentage fees.

This can be based on your knowledge and experience of previous similar projects, or relevant cost per square metre from a cost guide-book such as Spon’s, or just a wet finger in the air (not recommended!). There are electronic building cost estimating services you can use, such as the BCIS, which is provided at reduced rates to RIBA chartered practices.

But why base your fees on a percentage of a “guesstimate”? If you have carefully worked out what you have to do for the project and know your costs, why not propose a lump sum fee based on a clear specification of your service, so you can charge extra for any changes. This gives greater certainty for both the client and the architect, so is likely to be more attractive to both parties.