Division 2 addresses the client-architect relationship. It includes obligations about client agreements, fees and costs, diligence, communication, contract administration, confidentiality, conflicts of interest and disclosure of referral, recommendation and endorsement arrangements.
(1) An architect must not enter into an agreement with a person for the provision of architectural services if the agreement would result in an actual or potential conflict between the interests of:
(a) the architect and that person; or
(b) between a current client of the architect and that person.
(2) An architect member or director of an approved partnership or company must take all reasonable steps to ensure that that the partnership or company does not enter into an agreement with a person to provide architectural services if the agreement would result in an actual or potential conflict between the interests of—
(a) a member of the approved partnership and that person; or
(b) an officer of the approved company and that person; or
(c) a current client of the approved partnership or approved company and that person.
(3) An architect must not continue to provide architectural services to a client that result in a conflict between the interests of:
(a) the architect and the client;
(b) 2 or more current clients of the architect.
(4) An architect does not contravene this clause if the architect first—
(a) discloses the actual or potential conflict of interest to each affected person; and
(b) obtains the written consent of each affected person to continue providing services to both affected persons.
This clause recognises that a client's trust and confidence in an architect could be compromised if the architect's judgment is or could be influenced by interests that compete with the client's interests.
A conflict of interest arises when an architect has an actual or potential interest that could influence, or reasonably appear to influence, the advice or services provided by architects to their clients. Conflicts in architectural practice could arise in a variety of ways, such as:
- Acting for opposing interests: An architect may act for parties with opposing interests on the same or related project, such as designing a development for a developer while also advising a neighbouring landowner who objects to it.
- A personal financial interest in an outcome: An architect may hold a financial stake in a development company that is undertaking a project for which the architect is undertaking the design work.
- A close personal or family relationship with a party to the project: An architect could design a project for a family member while also acting as contract administrator, which may make it difficult for the architect to discharge the contract administration obligations impartially.
- A conflict between the architect's own interests and the client's: An architect may have an interest in prolonging a project to generate additional fees, or in recommending a particular consultant because of a personal relationship with the consultant.
A conflict of interest could exist even if a client benefits or obtains a financial advantage from the conflict.
Clause 12 seeks to ensure that architects provide independent, objective professional advice and services to clients. It prohibits architects from entering into or continuing engagements that give rise to actual or potential conflicts of interest, unless the conflict is fully disclosed and each affected person gives their written consent to the architect continuing to act.
Where a conflict exists and affects an architect’s judgment, this could harm the client. Even where a conflict does not actually affect the architect's professional judgment, its existence undermines the foundation of trust on which the client-architect relationship depends.
- A register of conflicts could be established, which records all current and recent clients, projects, financial interests and significant commercial relationships.
- Before accepting any new engagement, conduct a conflict check to determine whether the architect or firm has any existing client relationships, financial interests, personal relationships or other obligations that could conflict with the proposed new engagement.
- If a potential conflict is identified, it should be assessed and disclosed to all relevant parties immediately, in writing. Document consent from every affected person before proceeding and file the disclosure letter and the written consent.
- Possible conflicts of interest include, but are not limited to:
- an architect receiving payment (in money, material, or favour) for the referral of a client to a consultant, contractor, or other person/entity;
- an architect receiving or expecting to receive payment (in money, material, or favour) for endorsing, recommending, or specifying a product or service;
- an architect working on two separate projects that impact each other, such as two neighbouring properties in which objections from one may arise with respect to the other;
- an architect administering a building contract in which the architect or a close friend/relative has an interest in the contractor or any subcontractors;
- an architect working on a project in which they are not the client but in which they have otherwise invested.
- Be alert to conflicts that arise during a project, not just at the outset. If circumstances change (for example, a new party joins the project, a financial interest emerges, or a personal relationship develops), conflicts should be immediately reassessed and, where necessary, disclosed and consent obtained.
- Paid referrals and paid endorsements are types of conflicts of interest – See guidance below on Clause 13 — Disclose referrals, recommendations and endorsements.
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