AAR 3202

BUILDING CONTRACT
FORM OF ARCHITECTS PRACTICES
AND RESPONSIBILTIES

Prepared by:
Prof. Ar. Asiah Abdul Rahim
Lecturer,
Department of Architecture,
Kuliyyah of Architecture and Environmental Design,
International Islamic University Malaysia
Forms of Architect’s Practices and
Responsibilities
 Definition: an architect is in practice when he sells his services in
return for an agreed remuneration.
 Governed by the covenants of prevailing laws and Acts which
are in force within his localities and jurisdiction.
 There are several forms of practice which are recognized by
LAM such as Form of an Employee to a firm in private practice or
public sector.
 An employee is remunerated according to an agreed salary and
subjected to conditions of his employment contract.
 As professional, he may in course of his employment commit his
employer to liabilities civil and criminal if he is careless, negligent
and dishonest.
 He may be rewarded with an attractive salary, position and
respect from not only his employer, but the clients and public.
 As a public sector employee, he is not allowed to earn in
any other form of private architectural practices or
commissions due to guaranteed remuneration of the
economy. The architect has a lot to contribute if he can
assert influence on the quality of design to the public
projects. Therefore, his services must be conducted
professionally and diligently can be reward and repute to
him.

Sole Proprietor
 In private practice, an architect can operate as a sole
proprietor, in partnership or body corporate. As a sole
proprietor, he is the principal of the firm that may be
supported by a team of professional architects, technicians
and administrator. The demands of his professional service
may be overwhelming depending on the size and the
number of projects that he handles. The advantage is he
can enjoy his success and profits, all to himself.
Partnership
 Some architect prefer to operate in partnership with
another architect of whom he trusts. Partnership allow
at least two (2) persons who have agreed (expressed or
implied) to carry on a business in their common
financial interest.
 It is recommended that the partners enter into
partnership agreement on that stipulates the conditions
of the partnership including limitations on each other’s
conduct.
 There is also a legislation, the Partnership Act 1961 (Act
135) which can be referred to determine the conduct of
venture.
 The partnership exists where all businesses are
conducted with the partners sharingly shouldering the
responsibilities and liabilities including revenue,
outgoing and liabilities of the firm.
 This situations must be written down clearly in the
partnership agreement order to protect each partners.
 For all intent and purposes, the firm had been
responsible for the design and production documents for
the projects. If the absence of an expressed agreement
among partners, he may have to face the situation alone
even though he may solicit compensation from the firm
and other partners which could be protracted and
expensive.
 The principal issue in a partnership business is the
management of the firm’s affairs must be conducted in
the most transparent manner. It must observe the proper
use of the firm’s properties and assets for the common
financial benefits of the partners. It is the duty of each
partner to observe the utmost good faith, and they must
recognize the rights of each partner to demand accounts
of the business and to receive his rightful share of the
firm’s profits.
 Itis conceivable that in a partnership agreement, each of
the partners may be assigned a specified task or areas
of expertise. This can happen if the architect chooses to
enter into partnership with an engineer, town planner,
surveyor or other professionals permitted by LAM. In this
circumstances, the action of each of the partners that
contracts the firm with third parties will still bind the firm
regardless of the internal limitations imposed on each of
the partners.
Bodies Corporate
 As a business identity is governed by the Companies Act. In
this case, there must be at least two shareholders and directors
of the company and a registered company secretary before it
can be incorporated. Initially, the name of the company must
be selected and a search is done at the Registrar of
Companies (ROC) to obtain approval before the incorporation
of the company. In the case of an Architect’s firm, the name of
the company must be approved by the LAM and ROC.
 Memorandum and Articles of Association defining the objects
and conducts of the company has to be formulated and lodged
with ROC. Form 9 under the Companies Act 1965 is the
Certificate of Incorporation of the Private Company. The
company may be an unlimited company or limited company by
shares or guarantee.
 The companies Act has been legislated to govern the conduct
of the companies and their directors to protect the
shareholder’s interest and the public.
 Principally,the operation of the company is governed by
mandates given by the Board of Directors.
Administratively, all decision shall be sanctioned by the
Board in terms of Resolutions. This may slow down the
decision making process of the company.
 The ROC is very strict in ensuring the conduct of the
company is proper by instituting guidelines and rules. It
is an offense if the company fails to submit their annual
returns and audited accounts.
 This company has no limited lifespan unless the
shareholders resolve to wind up. The process of wind up
is tedious and protracted which requires sanction by the
court.
Multi-Disciplinary Practice
 Government directed all professional bodies to consider
the formation of multi-disciplinary practice (MDP) where
various professionals are allowed to team up together
and provide comprehensive service.
 The Board of Architects, Engineers and Surveyors
agreed to formula where a MDP must have at least 70%
shareholders comes from professionals and 30% non
professionals in order to practice architecture,
engineering and surveying.
 The architectural profession by its nature calls for
uncompromisingly high standards of conduct in design
and contract administration. It is for this reason that
certifications by architects are highly regarded by the
public institution and financial bodies.
 Circumstances will emerge where the architect’s services will
be required as part of a turnkey team. It is very easy for the
architect to compromise himself for the sake of getting a job.
Conversely, the architect can still provide his services in
accordance to the provisions of the standard Conditions of
Engagement stipulated by the LAM without compromise.
There is tendency for developers and turnkey contractors to
squeeze the consultants in order to maximize their returns.
Eventually, the consultants are still the entities shall carry the
liabilities with respect to the conditions of the building and
even the welfare of the occupants.
 Developers and turnkey contractors must recognize the
provisions of the law that require the submitting person to be
professionally liable. Should they wish to engage the
consultants, there is provision is there in the standard
agreement. However, there is no room for compromise as far
as professionalism and quality of the product concern.