Writing the budget into the architect's agreement

The Grand-Ducal Regulation (règlement grand-ducal) of 17 June 1992 laying down the professional code of conduct for architects and consulting engineers devotes a section to relations with the client. Two of its articles deal with the budget.

Article 8 requires written form. "For every commission, an agreement must be drawn up in writing and signed by both parties, at the latest once the commission has been defined" (unofficial translation). The text does not set the content of the agreement; it sets the point beyond which the absence of a written document is no longer acceptable.

Article 9 ties the design to the budget. "The architect and the consulting engineer shall ensure that they submit designs which remain within the limits of the brief set in the commission and of the budget deriving from it, in accordance with the agreement concluded between the parties. Any significant change to the brief set in the agreement, occurring during the design or the execution of the works, must be the subject of a supplementary agreement which shall state its financial impact."

Three words in this text govern the drafting. "Brief": the budget "derives from it", so it must be written next to the brief that justifies it. "In accordance with the agreement": the budget limit is the one the agreement sets, no more and no less; a figure mentioned in a meeting is not part of it. "Financial impact": the supplementary agreement (convention additionnelle) does not merely describe the change, it prices it.

A useful budget in an agreement answers six questions. None of them is imposed by the text in this detail; all of them determine whether it will later be possible to say that a design "remains within the limits" of the budget.

Entry	What to write	Why it matters
Amount	a single figure, not a range, excluding or including VAT	a range lets each party take the end that suits it
Scope	works only, or total project cost, with the list of items included	the architect compares their estimates with a works envelope, the client with their total cost
Base date	the price month to which the amount corresponds	without a date, the effect of price movements cannot be isolated
Assumptions	floor areas, specification level, known site constraints	they define what the budget pays for; anything outside them is a change of brief
Contingency	its amount or its principle, and who decides how it is used	a contingency merged into the budget is used up without a decision
Change procedure	who requests, who prices, who signs, and when	this is the contractual implementation of the Article 9 supplementary agreement

Amount and scope go together. A works budget is not a project budget: fees, surveys and studies, taxes, utility connections and ancillary costs come on top. How they combine is covered in the article on how a construction budget is built up. The agreement simply states which of the two amounts the architect must respect, and lists the items it includes.

The base date is the entry most often forgotten. More than a year frequently passes between signing the agreement and inviting tenders from contractors. If the budget is undated, a gap between estimate and budget cannot be split between project drift and price movements, and the question of responsibility becomes very hard to settle.

The assumptions define the brief. Writing "detached house of 180 m² of habitable floor area, full basement, standard specification" or "offices of 2,400 m² of usable floor area, major refurbishment of an existing building" fixes the content of what the budget pays for. When the client adds a storey, changes the use or raises the specification, they move outside the brief, and Article 9 then calls for a supplementary agreement.

The contingency is kept separate from the budget. Writing an explicit contingency, separate from the envelope, makes it possible to know at any time what has been used and why. How to size it by stage is covered in the article on contingency by project stage.

The text speaks of a "significant" change without defining it. Nothing in the 1992 Regulation sets a threshold above which a change becomes significant. The parties therefore have an interest in doing so themselves in the agreement, in terms of the brief (floor area, use, specification level) or in terms of amount, whichever seems relevant to the project.

Failing that, the discussion moves onto the ground of judgement. A client who has asked for ten small changes without anything in writing will find it hard to argue, at tender stage, that the design exceeds the budget because of the architect. Conversely, an agreement providing that, above an agreed threshold, every change is recorded in a priced written document draws a clear line.

The supplementary agreement is the tool the code of conduct puts at the client's disposal. For it to protect the budget, it should contain at least the following: a description of the change of brief and its date; its impact on the cost of the works, upwards or downwards, at the same base date as the budget; any impact on fees and on the programme; the new budget that results; and the signatures of both parties.

The new budget replaces the old one as the design limit. That is the whole point of the written form: the reference budget evolves with the brief, and each version is dated and signed. When the estimate later exceeds this updated budget, the question of where the gap comes from can be put on a clear footing. What follows an overrun is covered in the article on when the architect exceeds the budget.

The text covers design and execution alike. Article 9 covers changes "occurring during the design or the execution of the works". The supplementary agreement therefore does not stop when the contracts are signed: a change of brief decided during construction calls for the same written document on the architect's side, in addition to the agreement with the contractor.

There is no binding fee scale in Luxembourg. By its decision No 2024-E-01 of 25 March 2024, the Autorité de la concurrence (the competition authority) made binding the commitments of the Ordre des Architectes et des Ingénieurs-Conseils (the professional order of architects and consulting engineers): to stop circulating documents setting remuneration, to circulate standard contracts purged of indicative scales and fee calculation methods, and to remind members that they are "free to negotiate their own hourly rates for time-based work and their fees with public-sector clients".

For the budget, the question is not the amount of the fees but where they sit. The agreement must say whether or not the budget includes them, and how a change of brief affects them, which the supplementary agreement will specify. Fee levels and calculation methods are covered in the article on design fees.

Where several architects or consulting engineers (ingénieurs-conseils) work together, Article 15 of the 1992 Regulation requires their roles, responsibilities, insurance and remuneration to be defined in writing. For the client, this is the opportunity to specify who holds the overall estimate: the engineer pricing the building services packages and the architect pricing the rest must work to the same base date and the same scope, or they will produce two estimates that do not add up.

A client building in order to sell has a particular interest in this rigour. Article 12 asks the architect and the consulting engineer also to look after the legitimate interests of users and future buyers; a budget written with its specification assumptions makes visible what is promised and what is funded.

Article 9 obliges the architect to design within the budget; it does not turn the budget into a guaranteed price. Contractors' tenders remain subject to the market, and the architect does not set their level. The designer's independence, secured by the incompatibility with the profession of contractor (Art. 4 and 5) and by the duty to assist the client "under the best conditions of price and quality" (Art. 13), does not guarantee that the estimates are accurate either.

What the agreement provides is evidence. A written, dated budget tied to a brief, and supplementary agreements for each significant change: these are the documents that will allow the situation to be assessed case by case if a gap arises.