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marthavila_gw

Negotiating a Good Designer Contract (Long)

18 years ago

Happy New Year Everyone!

As some of you know, my kitchen remodel project, which began a year ago, has been beset by a series of fits, starts and restarts. So, after finally admitting to myself that I am in way over my head, I began searching for professional design help last fall. I now think I have found the designer/project manager I want to work with. Everything about his professional experience, design sensibilities, people skills and customer references, etc. appear to be sterling. I really, really like this guy alot and, having arrived at the new year, it is now time to sign on the dotted line and get going! Only hitch is that I am bit uncomfortable with these two clauses of the proposed contract:

1. The Designer shall obtain cost estimates for all goods and services. The Designer shall obtain estimates from contractors and subcontractors. The designer shall obtain estimates from contractors and subcontractors known to him as well as those known to or suggested by the Owner.

2. Drawings, schedules, specifications, and any other documents prepared by the Designer as instruments of service are proprietary to the Designer and are the property of the Designer whether the work they are prepared for be executed or not. They are not to be used for any other project, for additions to this project, or completion of this project by others provided that the Designer is not in default under this Agreement, except by written agreement with the Designer.

Now maybe this is standard language and there's no problem with these terms at all. However, I must also confess that, after 2 years of acting as GC for numerous remodel projects in my home (and not being very good at it),I've become paranoid about how best to establish project parameters, rights and responsibilities.

My concern with Clause #1 is that, although I clearly need the designer to help me identify the best contractors and subs, I do not want to be left out of the process of negotiating their fees! The way this contract language sounds, such decisions would pretty much be left to the designer to negotiate costs with those who will do the job. Bottom line: I'm worried about the potential for kickbacks.

As for Clause#2, I'm worried about what happens if (God forbid), this designer and I part ways before the project is completed. How come I don't own the design and drawings I've paid for? As I read these terms, if I were to retain anyone else to help me complete the project, the designer would have the grounds to sue me for assigning his work to another. I surely get the designer's concern that another may come along and claim his design to be their own. Not good. But at what point do I get to say that I also have some ownership of the design? Or do I?

So, for you designers and TKOS who have worked with them, my questions are these: Do either of these clauses flag any concerns for you? Do you think I have any reasonable concern about the potential for kickbacks? Do you think I need worry about who "owns" the designs and drawings I've paid for? If so, do you have alternative language or protective actions to recommend for either or both of these clauses? Or, IYHO, should I just let it go and trust a bit, stop majoring in the minors, and let the designer do the job as stated. . . and FINALLY GET A KITCHEN??? :)

TIA

Comments (15)

  • 18 years ago
    last modified: 11 years ago

    This sounds completely reasonable to me.

    Clause 1- Getting the estimates is part of his job. If you have to do all of that legwork, why pay a GC? It does not state that he will choose the contractor though- do you have final approval?

    Clause 2- If the two of you have to part ways, you can ask for the written permission to use the design. I think the more important thing is that he's making sure he's not doing all of the design work and then have the homeowner go with the lowest bidder.

  • 18 years ago
    last modified: 11 years ago

    The contract does not explicity state who has final approval on the hiring of the GC and/or subs. However, we both have tradespeople in mind who will be bidding on the project. I assume he will only recommend those whose estimates are consistent with the project budget and that, in consultation with him, it will be my ultimate decision as to who should get the job(s). On Clause 2, the contract calls for a 1/3 deposit at the time of execution and another 1/3 when the plans and drawings are delivered. I would think that, under those terms, the financial investment in his design efforts is pretty well secured.

  • 18 years ago
    last modified: 11 years ago

    You make me a kitchen, I make you retire!

    :-)

  • 18 years ago
    last modified: 11 years ago

    All contracts are negotiable, and most expect some changes. I would ask that a clause be added to the first referenced paragraph to the effect that, "Notwithstanding the forgoing, the Owner will make the final determination as to the goods, services, contractors and subcontractors that are retained for the Project." I would not, however, worry too much about kickbacks, though maybe I am naive?

    As to the second referenced paragraph I would ask if you can strike the paragraph and in it's place insert a sentence to the effect that for XYZ price, the plans are yours. If he doesn't go for that, then I would ask if there is any scenario where it would be acceptable to him for you to retain the plans. Be honest and state your reasons why you think they SHOULD be yours (which, btw, I think they should if you've already paid the $$ for the design). I'm sure the designer has dealt with this issue in the past. He probably has language he has used to deal with this very scenario.

    We even negotiated into the contract that change orders would NOT have the $250 admin fee and that if the construction takes longer than 10 weeks, then they will start paying us a penalty of $100 a day. My point is not that you need to ask for those particular changes, but rather that it is not unusual to ask for changes to these sorts of contracts.

    Good luck!

  • 18 years ago
    last modified: 11 years ago

    It sounds as if the designer will be acting as a middleman and you will more than likely be upcharged on many of the aspects of your remodel - unfortunately, that's how it goes.

    As to the contract, I'd suggest making sure the term 'default' is specifically defined.

  • 18 years ago
    last modified: 11 years ago

    When you say a third at contract execution and a third when the plans and drawings are delivered - are you talking about the entire cost of the remodel?!? That's means you're paying 2/3 of the entire job before any work actually begins. That's ridiculously high and might even be illegal in some places. If that's the case, then clause 2 is irrelevant, you're so locked into him, it doesn't matter who owns the design. I'd negotiate a different payment schedule or find another designer.

  • 18 years ago
    last modified: 11 years ago

    Thanks everyone!

    Cocontom and Weisman: This is a contract with an interior designer who will provide the designs as well as some modest project management. He is not to act as GC, but rather as my spokesman/interpreter/negotiator with a GC (or umpteen subs). In fact, his contract specifically deems him to be not liable for any faults, mishaps, etc. of the construction crew. His fees don't constitute even 10% of the project's total estimated cost. Yet that is also what has me a bit concerned about the potential for kickback on the contractor estimates. His hourly charge is $150 per but the flat project fee he has quoted, while not absurdly low, doesn't seem to square very well with that rate. Maybe he's just being incredibly generous with me and I am missing my blessings. At the same time, it makes me wonder if, and how, the difference might get made up elsewhere.

    Paulines: Here's where that famous line from "My Fair Lady" is appropriate -- "by jove, I think she's got it!" :) Yes. As project manager, he will be acting as a middleman to a GC (yet another middleman). Can you be more specific about what you mean as to defining the "default" terms?

    Socalthreems: I definitely understand that the contract is negotiable. In fact, this version I'm now looking at is a revised version that was supposed to incorporate my earlier stated concerns. I had already raised the issue about design ownership and I hinted (I guess not strongly enough) that I wanted in on the GC/sub negotiations. Seeing that his edits did not fully address my preferences, and not wanting to get involved in a potentially testy back and forth on terms, is why I posted my questions to this forum. I'm hoping you all will either declare me overly TKO or give me specific suggestions on how to handle the terms. Towards that end, I appreciate your specific language suggestions!

    Bill Vincent: What's not to love about you?! Talk about making me giggle. I think I just might say the same to you as I said to Paulines: by jove, I think he's got it! Boomer age, stressed out kitchen remodeler that I am, there is nothing more I would wish for myself than to be able to retire. LOL!

  • 18 years ago
    last modified: 11 years ago

    ok - that's clearer - you're paying him just for the design and help in starting up the project - then you should absolutely have rights to the design. He can retain rights as well but should not prohibit you from shopping the designs to other contractors if it turns out you're not happy with the ones he lines up. Who orders the cabinets and other materials? Is that something he does as well? Could be that's where he makes further money. It does sound to me like he's planning on an upcharge for the entire project - you should clarify that with him. Is there any reason that you're not just paying him for the design and then finding a GC on your own?

  • 18 years ago
    last modified: 11 years ago

    " He is not to act as GC, but rather as my spokesman/interpreter/negotiator with a GC (or umpteen subs). "
    So, there will be a GC on the job? If so, I would want some assurances from the GC he/she is OK w/the latitude/contract language from designer -I don't know a GC that would be willing to hand off that kind of latitude to a designer, perhaps I'm wrong.

    If no GC, I would be concerned about any potential liability for when things go wrong or unforseen things arise. Who will determine you need a temporary header, the window order was not measured properly?

    A designer is not trained/proficient in general construction a GC is and will be willing to help determine the best way to approach all the aspects of the project - As you well know from your own experience - this is not something one can learn overnight. A GC is also liscensed, bonded & insured as are the subs they contract -

    I think the buck stops with the one whom is paying the bill - If there is a GC then they pay the subs direct - If not, you do - In which case either the GC or you should be negotiating the subs. It just doesn't follow logic that the designer would negotiate subs given he is not going to stand by their work, nor is he paying them. Who is responsible for inspecting the sub work? Ordering the materials, getting dumpsters onsite, making sure no collateral damage was done etc....

    this may help
    http://www.hgtv.com/hgtv/shows_toh/article/0,,HGTV_3895_1927301,00.html
    gl

  • 18 years ago
    last modified: 11 years ago

    Ok, the reason why I'm using a designer/project manager is that I'm sick and tired of the kitchen renovation rut I've been stuck in for nearly a year now! Enter the services of a certified interior designer who will now come in to put a plan together that is both aesthetically pleasing and functional. He will find the materials and finishes I've been pining for and be able to purchase them at a designer discount. Then, as project manager, he will be able to explain that plan to the tradespeople who must execute it -- quickly, accurately and in their own language. He will have moderate project oversight (making an onsite visit to the project at least once a week) and will intervene with the tradespeople on my behalf should problems arise.

    At this point, I've lost way too much money and nerves by trying to go it alone on a project that started out being a just a "modest spiff up" but which has now morphed into a fairly significant reno project. (I blame that, in part, on having discovered the GW kitchen forum and then becoming TKO!) Not having enough trade and design basics at my disposal when I began has caused me countless plan changes and revisions, costly mistakes in purchasing of materials (including appliances and cabs), and frequent bad choices in hiring smooth talking subs who end up either doing mediocre -to- lousy work or completely botching the job. Enough!

    I now think I will actually SAVE money by hiring someone (designer/project manager) who will be paid to hear my desires and needs, translate them into a plan that is consistent with my heart and budget and then serve as the person who will convey his/my orders to a GC or posse of subs.

    I don't foresee any problem with the project manager working with the GC and vice versa. In fact, 2 of the GCs I've been talking with about the project have both stated that they would welcome working with the designer/pm. They know that the experienced professional who has designed my plan is going to be better equipped to instruct and assess its technical and aesthetic execution than me in most instances.

    Jejvtr, your question about liability is a good one. I have verbally confirmed with the designer/pm that no subs are to be hired who do not have required licensing and insurance. I'll make sure that condition is explictly stated in the contract.

    As to who pays the GC (or subs), that will be me! Again, the designer/pm will oversee the plan progress. When he is satisfied that each phase which triggers a payment has been satisfactorily completed, he will advise me that it's time to pay up.

  • 18 years ago
    last modified: 11 years ago

    Marthavila - I completely understand where you are coming from, though ironically we did the exact opposite of what you are doing! We hired an ID to help with the house/figure out where I should put my money/etc, and found that she just charged way too much for things I was already doing on my own. I really wanted it to work though, and I think part of my problem was her...or "us." She just didn't seem to understand my budget constraints (we have mutual friends that she has worked for that really have no budgetary constraints and I guess she thought that mine were optional?) and would pick out things that I clearly could not afford. It was a bummer, but I learned alot (after wasting alot of money on her fees).

    It sounds, though, like you have a meeting of the minds with this person and that he understands your budget and can work within its parameters and that is a great thing. Most of my friends have done it that way, and their houses and kitchens are amazing, with touches that only an ID would think to add. Will you also use a KD?

    Anyway, in my case there was a $125 hourly fee, BUT if we went to construction it would be a percentage of construction costs (I think it was 17%, but don't have the contract in front of me to confirm). I would have received designer discounts on all items that she gets a discount for (depends on the source) and the fee would have covered how ever many hours it took to get the job done. I, too, would have hired a GC to oversee the actual job.

    As for your clauses, it's hard to suggest specific language without seeing the entire contract because obviously any suggestions we make could impact other clauses in the contract. I'm really not too worried about the first clause, esp if you add something to the effect that it is your choice. I do think however, that with regard to the second clause he should be willing to strike it. I just think it is normal practice in the field that for a certain fee (which you would have paid) you own your plans. This is true with architects too.

    I will be interested to see how this turns out. Good luck. I'm sure your remodel will be incredible!!!

  • 18 years ago
    last modified: 11 years ago

    something to keep in mind,( having a new york state of mind ) kickbacks are very real in this line of work. they may come in different forms other than cash. and you would never know it.
    also,
    i have seen in many instances where a contractor started work on a job and then would take a day off here and there to do other work else where.this causing long delays for completion. i have used a clause stating that if the contractor didn't show more than x amount of time either daily or weekly then he/she would be fired and forefit any monies due he/she. also make sure the contractor is responsible for the subs work and bringing all work to code. any work not brought to code would again be grounds for non-payment.
    be aware of fees to change from original plan they could be rediculous. just to add/change location of an outlet.

    there are alot of quality contractors who have for some reason or another turned to crap after finishing a well done job else where. don't let it happen to you. as long as you hold the cards he has to comply.
    best of luck and happy new year.
    john

  • 18 years ago
    last modified: 11 years ago

    marthavila, by specifically defining 'default', I meant somewhat what John is saying. Tradesfolks are infamous for pulling disappearing acts in the final quarter of projects - if Mr. ID goes awol or is not returning phone calls or he is not effectively intervening with the plumber who keeps postponing or the electrician who installs your outlets crooked - what happens?

    Set a reasonable timeline for your project's progression and specify exactly how many days, weeks or months past completion (of each item) constitute a default. Hope this is clear!

    "He will find the materials and finishes I've been pining for and be able to purchase them at a designer discount."

    What usually happens is the ID purchases at a discount and them upcharges the client. The client will pay comparative retail or better.

    One last point. Has this ID done kitchens? How many and what were the parameters of the projects? Like jejvtr has mentioned, a CID is not trained in project management or K/B design for that matter - he may have no more experience than you. Please be careful.

  • 18 years ago
    last modified: 11 years ago

    Well, again I want to thank you all for listening to my violin song and offering your condolences! LOL!

    You know, I think Bill V. actually got it right though. At some point, I really do have to let go. As I try so hard to prevent any and all possible disasters from occuring with this neverending reno project, it seems to me that the biggest disaster is my talent for getting in my own way! Now, in the same one year period since I began my own project, I have seen 2 good friends and my sister go from A-Z on their kitchen remodels. All three of them had contractors who caused me raised eyebrows; none of them had a contract I would have dared to sign; all three made some choices and got some results I would not have wanted for myself. But, in the end, all three of them had wonderful new kitchens to show off at Christmas whereas I, the only TKO in the bunch, am still here in the new year without a kitchen!

    I think being a TKO is both a blessing and a curse. It's a blessing when we are able to use the combo of our common sense and practical experiences, our design instincts, the advice of this forum, and due diligence in order to turn out these wonderful kitchens that we all ooh and aah over. But it can be a curse when our struggle for perfection also acts as a straitjacket.

    For folk like me, I'm finally acknowledging that if I ever really want get from point A to point Z, there is a point at which I must either drive the car myself or move over to the passenger seat and let someone else take the wheel. That time has come. No doubt, when I surrender the wheel to the designer/pm and GC I will still suggest they take the scenic route, or stop to pick up an attractive hitchhiker, or change tires, etc. (I'm also pretty certain they will find ways in which to load their own cars with premium when regular would have been just fine.) But, for me, it also time to get movin'! Just know that, as I buckle up my seatbelt and ride off into the kitchen reno sunset, I will be carry along with me your your words of wisdom, good wishes and good luck as I'm sure I will need them. :)

  • 18 years ago
    last modified: 11 years ago

    I used a KD in much the same way you are discussing. She assisted me in finding a GC, but was absolutely OK w/ me finding someone on my own. I ended up using one of the people she had suggested largely because my remodel was relatively small (from a contractor's POV) and I wanted the KD involved since she would have greater leverage if something went awry. She bid out the granite, backsplash, etc. I tracked down the backsplash people and she came up with suggestions for granite. Ultimately, it was my decision who was selected to do what and she was exceptionally helpful when it came to dealing with the granite people whose fabrication left a lot to be desired.

    As far as the design, that's a bit harder. One of the KDs who I interviewed, charged a flat rate for her design ($500). If there was a parting of the ways during the job, it was clear that the elevations were mine. I suspect that these costs are built in somewhere in your estimate from the KD. If not, and given your experience after the past year, I'd suggest asking to have this specified in the contract even if it's only for increasing your comfort level. Most of the people I interviewed wouldn't even show me a sketch of what they were bidding on. Needless to say, I didn't use any of the people who weren't going to let me kick the proverbial tires.