New HOAI 2021 – Impact on contract design in practice

New HOAI 2021 – Impact on contract design in practice

On January 1, 2021, the new Fee Structure for Architects and Engineers (HOAI 2021) came into force. The revision had become necessary due to the ECJ ruling of July 4, 2019, according to which the binding price framework of HOAI 2013 with its minimum and maximum rates violates the European Services Directive. With HOAI 2021, the mandatory minimum and maximum rates have been abolished. The new freedoms in the compensation regulations must now be used correctly in practice when drafting contracts:

What has changed?

HOAI 2021 no longer provides for binding minimum and maximum rates for basic services. All fee regulations of the new HOAI have only orientation character. The contracting parties may have recourse to it, but do not have to. In order to implement the task of the binding price framework also linguistically, the former “minimum rate” became the new “base fee rate” and the “maximum rate” became the “upper fee rate”.

In the future, deviations from the fee regulations of the HOAI will no longer lead to the invalidity of the contractual remuneration regulation. As a result, it is no longer possible for one of the contracting parties to subsequently question the contractually agreed remuneration arrangement on the grounds that the minimum rates have not been met or the maximum rates have been exceeded. Minimum rate lawsuits by commissioned architects and engineers are now a thing of the past.

The HOAI 2021 contains further changes, which are predominantly to be located in the formal area and give the contracting parties more flexibility. For example, in the future it will be possible to conclude fee agreements in text form rather than in writing, i.e. signed by both parties. This means that compensation agreements can now also be effectively concluded by e-mail or even messenger services such as WhatsApp. In the absence of a fee agreement or if the text form is not complied with, the basic services rendered are to be remunerated in the future according to the “base fee rate”.

What to do?

The task now is to make sensible use of the new freedoms created by the legislator through HOAI 2021. To this end, it is essential to adapt model contracts from before 2021. It is not only necessary to update the outdated designations and references, but above all to use the new possibilities to avoid disputes about the architect’s and engineer’s fee settlement by means of clear remuneration regulations.

Choosing the right compensation model

The abandonment of the binding price law legally allows the remuneration of the planner to be completely detached from the HOAI and to resort instead, for example, to a lump-sum price, a time-based remuneration (hourly/daily rates) or even a success-based remuneration. Flat rates in particular were popular even before the reform, and in future the client no longer has to fear that the agreed flat rate will be invalid due to violation of the minimum rate.

However, such regulations are not always reasonable and appropriate. There still remains a wide area in which the practice will resort to the remuneration calculation according to the HOAI. The calculation fee according to the HOAI is always suitable when the construction project is in such an early phase that the effort and costs cannot yet be sufficiently determined. Then the planner often lacks the necessary calculation basis for offering a lump-sum payment. In turn, a fee based on actual effort would be too uncertain for the client. By linking the fee to the construction costs yet to be determined (chargeable costs), HOAI 2021 will then offer a tried and tested way of reaching an appropriate fee agreement that is customary in the market.

Contractual definition of the billing parameters

If the contracting parties decide in favor of remuneration in accordance with the HOAI, they can now specify the relevant billing parameters in a binding manner in the planning contract. In this way, a higher degree of cost certainty can be achieved and no disputes arise later on during billing.

In addition to the determination of the fee rate, which is necessary in any case, and the regulation of any surcharges for remodeling services, ancillary costs, etc., since the new regulation, for example, the contractual fixation of the applicable fee zone, the division of the settlement objects and the building substance to be included also offers itself. Differences often arise over the latter points during billing. It is therefore advisable to make a provision in the contract that is binding even if the HOAI would permit a different classification. This is possible because under HOAI 2021 there is no longer any fear of falling outside the statutory price range, which previously led to ineffectiveness. In detail:

• The fee zone to be applied for the calculation of remuneration is determined according to the HOAI on the basis of different valuation characteristics. This can quickly lead to differing assessments, which would have to be clarified by an expert in the event of a dispute. The fee zone should therefore be specifically and bindingly agreed in the planning contract, irrespective of an assessment according to the HOAI. It must be made explicitly clear in the contract that this agreed classification also applies if the HOAI would permit a different result.

• The “building fabric to be included“ in the calculation of the fee often leads to disputes when settling the fee for renovations. Their determination is extremely complicated. There is considerable scope for judgment in this regard and therefore potential factors giving rise to disputes. The building fabric to be processed should therefore be conclusively agreed in the contract irrespective of an assessment according to the HOAI. It can also be arranged that it is not credited at all and that an appropriate conversion allowance is paid instead.

• The classification of billing objects is also a frequent cause of fee disputes. Invoicing according to HOAI is done by objects and is always calculated separately for several objects, § 11 para. 1 HOAI. Since the remuneration tables are not linear, in principle there is a higher fee for several small objects than for one large one. There is extensive literature and rulings on when uniform objects exist or when they are to be added together and when they are not. If you want billing security here, define the classification of the billing objects in the contract in a binding manner and make it clear that this regulation takes precedence.

Both contractual partners benefit from a clear regulation of the remuneration and can concentrate together on advancing the construction project in partnership.