What to pay for supervising renovation project

[Covkid]

Does anybody know what would be a reasonable amount to pay, to a property managing agent, to supervise a quite substantial property renovation.

Our managing agent is claiming 10% of the final cost of a major renovation on our house for her supervisory role.

We're just wondering if this is a fair cost. If you've had this kind of experience we'd be grateful to have your comments a.s.a.p please.

Thanks.

[Paul_f]

The answer is within your terms of business with the agent.

It all depends on whether you were aware of such a potential situation and the fee the agent might charge to be directly involved. If you instigated the work, paid the contractor etc. and the agent just dropped by now and then, it is open to interpretation as to whether they are entitled to their fee, and I would say you would have a reasonable case.

I have always said that it is better for the agent to charge on an hourly basis as this is a fairer way of calculating a fee. To charge 10% of the work is a common clause in TOBs if the agent has a high input factor but might not be representative of the true cost, and in fact could be a penalty on the landlord rather than a "reasonable fee".

My only comment would be that using the percentage of the cost of the work as the basis for calculation of a fee might be considered to be unfair, but as only a court can decide then you will have to argue your case with the agent to see if he will see your point of view first.

You will have less ground for a challenge if you have signed a terms of business to this effect; there's a good chance you probably didn't read it beforehand!

[SteveP]

My only comment would be that using the percentage of the cost of the work as the basis for calculation of a fee might be considered to be unfair, but as only a court can decide then you will have to argue your case with the agent to see if he will see your point of view first.

Actually this is a typical way of charging for such work, since there is normally some relationship between the amount of professional work involved and the building work involved.

It isn't really possible to say whether 10% is a lot or not, much would depend upon the value of the building works. We, and all surveyors/architects, would charge a greater percentage for a low value job than for a high value job. If I were supervising a £10m contract I'd think I'd won the lottery if I could charge 10%, but if I was supervising £10k worth of work I'd have to charge more than 10% or I would starve to death.

To some extent this percentage method is the best way for all concerned, it is in the nature of building works that the extent of the work sometimes changes and the surveyor ends up doing more than was originally envisaged.

If you are not obliged to use the managing agents I'd suggest you look up some chartered building surveyors in your area on www.ricsfirms.com and see what they will charge....and if you are in our area give us a call...but not me personally I am just off to the far east!