AIA B105 says
"The Owner shall pay the Architect an initial payment of _____ ($___) as a minimum payment under this Agreement. The initial payment shall be credited to the final invoice."
I add "The initial payment shall be the minimum payment due the Architect" and "The final invoice shall be submitted after Occupancy Permit".
So, the initial payment is mine to keep, and I get to bill for what I've done up until the end of the job before I have to reduce a bill by the "deposit" amount. If the Owner never gets an Occupancy Permit inspection, I might not have to do that reduction.
Then it is my job to be sure that I bill regularly when I've done some work on their job.
In the bigger-scope AIA Owner-Architect Agreements, the standard text provides for payment of "termination expenses" if the Owner pulls out. These are to cover reassigning staff, records wrap-up, etc.and I think those agreements state that. Might even have text about paying for some of the expected profit that is lost when the job dies. Many Owners of such bigger projects x-out that part.
I also tell Owners that I need to see both the signed Agreement (I will accept a cellphone photo of each page) and have the initial payment check in hand before I seriously start work. They almost always end up printing a copy of the Agreement and mailing it with the check.
[Separate topic, but I haven't yet gone to online payments and tell Owners would rather not have to markup my fees to cover the bank's handling charges for online. I *could* accept a personal on-line transfer, but prefer to not mix business account with personal; that's why I pay myself with draws.]
"Deposit" and even "retainer" (to me at least) don't sound as hard and fast as "payment" to me. If someone is willing to make a payment, it says that they are putting some value on my services. "Deposit" has a bit too much suggestion that they might get some of it back if the project is abandoned.
I don't charge separately for an initial site visit and project discussion. I generally agree with the idea that people should expect to pay for something they value, that I should value my time too, but so far I haven't implemented that. I am moderately surprised when clients ask me if I need a check for the time we just spent together. However, for the tire-kickers, maybe telling them "I can come and spend some time with you next week, have a $XXX check ready" would leave me a bit more time for the people who are already paying me to do their job.
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Joel Niemi AIA
Joel Niemi Architect
Snohomish, WA
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Original Message:
Sent: 07-25-2021 12:04 PM
From: Robert Marrapodi
Subject: Refunding contract fee deposit.
Does anyone have language in their standard contract for a renovation project that deals with refunding a client's deposit When the contract is terminated by the client or architect? Should the client be in titled to a refund after schematic design is completed and the architect has fully committed his firm to the project. We are a small firm with limited project volume.
Robert Marrapodi
Marrapodi Architecture
21 E. Market St.
Third Floor
Rhinebeck NY 12572
T. 845-876-0733
M. 845-849-4540