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 recommend, endorse, or specify a product, service or service provider to a client if the architect receives or expects to receive or could receive an inducement or other benefit from a third party to do so unless—
(a) the inducement is in the nature of salary, wages or attributable personal services income from an approved partnership or approved company; or
(b) the nature and value of the inducement is first disclosed in writing to the client.
(2) An architect must disclose the nature of any referral arrangement in place between the architect and another person to a client before entering into an agreement to provide architectural services to the client.
(3) An architect who is a member of an approved partnership, or a director of an approved company, must ensure that the nature of any referral arrangement in place between the approved partnership or approved company and another person is disclosed to a client before the partnership or company enters into an agreement to provide architectural services to the client.
(4) For the purposes of the clause, referral arrangement means any arrangement to introduce or refer clients to an architect, approved partnership or approved company for valuable consideration.
Architects occupy a position of significant professional trust with their clients. Clients often rely on architects’ recommendations about building products, builders, engineers and other service providers, and typically lack the knowledge or expertise to independently evaluate those recommendations.
An architect could be motivated to recommend a particular product or provider because it generates a benefit for the architect. As a consequence, the client may end up with an inferior product or service and/or may pay more for the product or service than the true value.
The obligation in the Code to disclose the nature and value of a benefit that the architect could obtain enables clients to make fully informed decisions about whether to accept architects’ referrals, recommendations or endorsements in circumstances where they may obtain a benefit.
- A written register of commercial relationships with suppliers, consultants, contractors and other service providers from which the architect or firm receives or could receive any financial or other benefit could be helpful to manage compliance with clause 13.
- Before recommending, endorsing or specifying any product, service or service provider to a client, the register could be checked to identify any existing commercial relationships that could trigger application of clause 13.
- Retain copies of all disclosure letters and client acknowledgements on the project file.
- Train all staff to recognise what constitutes an inducement or referral arrangement.
- Paid referrals and paid endorsements are types of conflicts of interest – See guidance above on Clause 12 — Manage conflicts of interest.
Updated