Architecture

as BusinessAR 5142 - Group 2

Delos Reyes, Loreto Jade
Quibilan, Gabriel Niño
Rosales, Shirlyn Mae
 The business side of architecture provides a

Architecture
platform for practicing architects in the
Philippines to develop their careers both

as Business
financially and professionally.

It yields different factors that range from

organizational to legal which all help
architects in planning out their careers.
Understanding the
Business Side of
Architecture
External Internal
Factors Factors
Competition Business Strategy
Financial Management
Regulations and Codes
Human Resources
Technologies Marketing
Demographics Business Operations
 Types
Single/Sole
Business Proprietorship
Organization
This provides a legal structure for practicing
architects to carry out their commercial Partnership
services.

Corporation
 Efficiency Based
Focuses on simplicity and offers a
limited range of services. Marketed as
specialists for routine projects.

Experience Based
Business Types Focuses on gaining experience from

and Models complex projects. Common in firms that

are new.

Expertise Based
Refers to award-winning or more
experienced firms with a knowledge on a
particular specialty.
Passive Active
Income Income
Investments Professional Services
Licensing Fees
Royalties
Consultations
Online Courses Real Estate Development
E-books and publications
Responsibility of Client Relationships
an Architect Architects apply their knowledge and skills to
transform the client's vision into a practical and
visually appealing design. Clients offer project
Design and requirements and resources.
Planning
Collaborations with
Project
other Fields
Structural Engineers
Management Mechanical and Electrical Engineers
Master Plumbers
Interior Designers
Landscape Architects
Sustainability Environmental Consultants
Practices Acoustic and Lighting Designers
Historic Preservationists
Contractors and Builders
Importance of
Financial
Management in
Architecture
Firms
“ You’re only as good as
your next project comes...”

- Cortes Architecture
Crucial Role of Financial
Practices in Running a Firm
For smaller firms, it is important to instill the mindset that the firm must
function in accordance with what projects it is working on currently
while not foreseeing the next project. This pragmatic approach
influences the financial practices the office would take in order to keep
the business afloat.
Budgeting
Determining the amount and resources needed to execute on a per-project basis,
avoiding unnecessary costs.

Financial Planning
Knowing what are the monetary goals for the firm in order to strategize and
prepare for the future for the business’ sustainability.
 Cash-Flow Management
Outlining the phases of a project to maximize the allotted budget

Financial Planning
Knowing what are the monetary goals for the firm in order to strategize and
prepare for the future for the business’ sustainability.
Effectiveness of financial
management strategies and
their contribution to the firm
Sustainability
Profitability
Growth
Growth
Being frugal in investing assets to ensure that unnecessary costs are avoidable
Ensuring that the value of the service being offered is not compromised in order to build
a niche.

Profitability
Avoiding unnecessary debt can ease operating costs to maintain the business
Invest in expanding the branches of service to bring more value to the firm

Sustainability
Necessity in monitoring and managing the firm’s finances on a per-project basis
Prioritizing needed assets in budget allocation in undertaking a project to continue
business operations
Impact of... in architectural
projects
Accurate Cost Estimating
Project Management
Resource Allocation
Financial Decision-Making
Accurate Cost Estimating
Foresees the construction cost which can be referred to as maximizing the
allotted budget. It also enables to building of trust between the
contractor/architect and the client.

Project Management and

Scheduling
Outlines the project phases from start to finish. Also a recommended manner in
utilizing the allotted project budget.
 Resource Allocation
Scheduling of manpower, materials, and equipment in order to
efficiently execute the project.

Financial Decision-Making
Managing the financial circumstances of the firm while undertaking a project
correlates with the entire aspects needed for to keep the firm in operation.
Legal and
Regulatory
Considerations
for Architectural
Businesses
Licensure Procedures
Requirements
NSO/PSA Birth Certificate
NSO / PSA Marriage Contract (for married female applicants)
Transcript of Records with scanned picture and Remarks "For
Board Examination Purposes"
College Diploma (First Timer)
PTR, IAPOA number of architect Mentor (First Timer)
NBI Clearance (First Timer and Repeater)

Logbook of Diversified experience

Affidavit of Experience signed and sealed by a registered
Architect with updated ID
Masters Degree in Architecture - one (1) year practical experience
Affidavit of Experience signed and sealed by a registered
Architect with updated ID

Payment of 900 Pesos

https://www.prc.gov.ph/requirements/architect
Business Registration
Involved Organizations
Building Codes
BP 344: Accessibility Law
PD 1185: Fire Code of the
Philippines
PD 856: Sanitation Code
PD 957: Housing and Land Use
Regulatory Board (HLURB)

PD 1096
Legal Documents
Employment
Contracts
Agreement

Profession Non-Disclosure
Liability Insurance Agreement (NDA)
CONTRACTS
is a legally binding agreement between two
or more parties that outlines the rights and
responsibilities of each party involved in the
agreement.
EMPLOYMENT AGREEMENT
Similar to a contract, it refers to the formal
agreement between an employee and an
employer in order to establish the working
arrangement and protect the interests of
both parties.
PROFESSION LIABILITY INSURANCE
A type of insurance coverage designed to protect
architects from financial losses resulting from claims of
negligence, errors, omissions, or inadequate work
performance
NON-DISCLOSURE AGREEMENT (NDA)
A legally binding agreement between two or more
parties that establishes confidential information for a
specific project.
Zoning Regulations
Important Documents:
Comprehensive Land Use Plan (CLUP)
Comprehensive Development Plan (CDP)
Zoning Ordinances
Use Classification
Special Permits
Building Permits

PD 1308:
“Law Regulating the Environmental Planning
Profession in the Philippines”
PD 1096:
National Building Code of the Philippines
Environmental Considerations

Environmental Impact Green Building Stormwater

Assessment Certification Management

Indigent Species & Habitat

Protection Protection
Intellectual Property
Protection
RA 8293
Intellectual Property Code of the Philippines
“Copyright in a work of architecture shall include the right to control the erection of any building
which reproduces the whole or a substantial part of the work either in its original form or in any
form recognizably derived from the original: Provided, That the copyright in any such work shall
not include the right to control the reconstruction or rehabilitation in the same style as the
original of a building to which that copyright relates.”
RA 9266
Architects Act of 2004
Refers to the unlawful action of duplicating documents that are duly signed, stamped, and
sealed by an architect, who has ownership of it as intellectual property. This applies to both
duplicating it as parts or a whole.
 The legal aspect of architecture protects
practicing architects as these give us
guidelines in designing buildings that adhere
to regulatory requirements in the country. It
HOW ARE LEGAL ensures architects to practice an ethical and
CONSIDERATIONS professional design process.

IMPORTANT IN OUR Additionally, these protect architects from

PROFESSION? legal troubles as these set a parameter of
their rights as professional workers. These
considerations, materialized into authorized
documents, aid architects when it comes to
legal disputes
 Risk
Management
and Insurance
for Architects
Types ofArchitectural
RisksBusinesses
faced by

Insurable Non-insurable

Measurable risks Dynamic risks

Accidental risks Fundamental risks

Pure risks Speculative risks

Types ofArchitectural
RisksBusinesses
faced by

Professional Liabilities
Deals with:
Architects Contractors Clients Finances

Design Flaw Alterations Sue

Safety issues Building reinforcements Negligence

Financial Problems Cheaper materials Unsatisfactory Service

Not liable for:

alterations made by damages/violations made by using of structure for a
contractor/owner or the contractor/owner that is different purpose even if it
another architectwithout outside of the architect’s was not designed that way.
the architect’s permission. control/knowledge.
Types ofArchitectural
RisksBusinesses
faced by

Project-related Risks
Common External Project Management
Construction Contractual relations Poorly understood project
Financial and economic Unforeseen events objectives, costs and
Performance Social factors deliverables
Security Organizational Contractor/consultant
Contractual and legal delays
Inexperienced staff
Physical Lack of coordination/
Lack of staff during project
Political and societal communication
duration
Estimation and/or
Technical Insufficient planning time
scheduling errors
Design process Inconsistencies in time,
Inexperienced staff
Construction scope, objectives and cost
Too many projects to handle
Environmental factors Change of priorities
Unanticipated workload of
project manager
 Types ofArchitectural
RisksBusinesses
faced by

Contractual Obligations
Indemnification
Lender Requirements and Certifications
Copyright and Ownership of Documents
Design-Build and Public-Private
Partnerships
Limitation of Liability
Standard of Care
Time Restrictions
Sustainable Design and Certifications
Professional fees
 Industry-specific Risks
by Architects
Errors and omissions Design flaw
professionals from various fields may have design layout that is poorly
different ideas and methods on how a process planned without regards to the
should be done. safety and experience of its
the more complex the project is, the more users.
likely that errors occur. fails to achieve its design
mistakes occur due to lack of- or improper objectives.
instruction.
requirements from the building codes are not
complied or shown in the plans/specification.
cause a delay in drafting due to constant
revisions.
 Industry-specific Risks
by Architects
Disputes and arbitration Construction delays
inability to balance the conflicting needs of project event occurs at a later
the client and other allied professionals time than the planned schedule.
causes the architect to be in the middle of reasons usually associated with
disputes. conflicts with client and other
arbitration is a private, contractual form of allied professionals.
dispute resolution. caused from constant revisions.
determination of disputes by a third party
arbitrator or arbitration panel.
resolved on the basis of relevant principles
of law, material facts and documents.
process is administered by an appointed
arbitrator.
Risk Management Strategies
by Architects
Risk Assessment
Analyze business processes

S TRENGTHS
Identify and expand
W EAKNESSES
Identify and find
O PPORTUNITIES
Research and
T HREATS
Review internal and
on firm’s strengths. solutions to address. identify the firm’s external factors for
potential. threats.

Survey for risks at every level

Look for potential threats in every field or area of the firm.

Conduct surveys to employees assigned to different levels.

Risk Management Strategies
by Architects
Risk Assessment
Identify common risks within industry

Identifying the common risks experienced by other

firms will serve as a guide for what policies should be
taken and strategies should be followed in order to
reduce these risks.

Record risks

Documenting the different types of risks encountered

by the firm will help identify which policies should be
implemented to protect it from future risks.
Risk Management Strategies
by Architects
Risk Assessment Construction companies generally calculate their risks in every
project through assessment forms. These help them manage their
Examples actions on potential risks that are specific to a project.
Risk Management Strategies
by Architects
Mitigation Techniques
Hire a risk consultant
to help identify the different areas of risk and provide solutions for them.

Hire an accountant
to help firm avoid financial and compliance risks.

Develop a risk management strategy

plan for ways to manage the current and future risks.

Buy an insurance plan

protects business from risks.

Risk Management Strategies
by Architects
Mitigation Techniques
Conduct research before applying for a loan
look for available loans with achievable payments/interests.

Document financial information

keep track of records in order to lower risks.

Be informed about laws and regulations

to avoid compliance risks.

Compare the risks and benefits

compare the weight of risks and benefits on the choices.

 Risk Management Strategies
by Architects
Insurance Coverage

Insured Owner/Client Designer Contractor

Covers any part of the Contractor’s All Risk

Property works taken over Insurance (CARI)
Insurance Latent defects
Profit Loss

General liability for negligence

General liability General liability and non-negligence
Non-indemnity by Non-indemnity by Employer’s liability
Liability contractor contractor Professional damage for design
initiated by contractor
General liability for non- General liability for non-
negligence negligence Marine insurance
Motor insurance
Importance of Professional Liability Insurance
“Errors and Omissions Insurance”
Covers
Misrepresentation protects professionals who have
Negligence expertise in an area such as
Malpractice architectural businesses against
the costs of lawsuit by clients.
Design errors
Budget overruns
aids in defending against
Project delays
allegations of offering services
Doesn’t Cover with error.

Property damage
developed on a claims-informed
Bodily harm basis within a certain timeframe.
Illness or work-related injury
Data breach
Importance of Property Insurance
“Errors and Omissions Insurance”
Forms
protection against damage to- or
Auto insurance
loss of- expensive personal
Homeowners insurance
property.
Renter’s insurance
Flood insurance advisable for individuals who own
an expensive property.

Doesn’t Cover
damages must be “sudden and
all personal property
accidental” not damages done
equally, such as
over time.
jewelry
Importance of General Liability Insurance
Covers “Business Liability Insurance”
“Commercial Liability Insurance”
Injuries and accidents
Damage to property
protection against the costs of
Personal injury and slander lawsuit by client’s claims
Advertising injuries associated with accidents or
Doesn’t Cover damage caused by employees.

Misrepresentation
Negligence provides coverage to damage to
Malpractice reputation.
Design errors
Budget overruns
Project delays
Company or employees’ personal property damage
Conclusion
The industry calls for architects to build relationships with clients as this is essential. These
partnerships contribute significantly to professional growth and success in a competitive field.
Architects who practice resource allocation and sustainable growth ensures their financial
viability. There is also the ability to navigate the complex legal landscape and mitigate risks
effectively. By identifying potential project risks early on, architects can reduce the chances of
costly legal disputes and project delays, ultimately ensuring the long-term success of their
projects and their relationships with clients.
THANK YOU!