The official scale of fees for services by architects and engineers, Honorarordnung für Architekten und Ingenieure – HOAI, has stipulated mandatory upper and lower limits for the remuneration of architects and engineers. The European Court of Justice (CJEU) ruled in July 2019 (C-377/17) that obligatory binding minimum and maximum fees do not comply with European law.
According to the CJEU, it violates the EU Services Directive on the freedom to provide services. This was despite the court confirming that minimum rates can help to ensure the high quality of planning services. However, it ruled that the German regulation did not pursue this objective in a coherent and systematic manner, since planning services could also be provided by service providers without having to prove their professional aptitude. The CJEU did not consider the binding nature of the maximum rates to be necessary, since the German Government had not sufficiently substantiated that a non-binding framework for pricing is not sufficient to guarantee consumer protection.
As a consequence, the obligation to comply with binding minimum and maximum rates had to be abolished. This was executed by an updated HOAI after long and intense discussions between the professional associations, the competent German ministries, the Parliament and the second legislative chamber (Bundesrat).
The Federal Chamber of German Architects, BAK, undertook everything to ensure that architects and engineers could continue to benefit from the usual, tried and tested fee structure. The whole legislative process lasted until November 2020 with the adoption of the draft law through the second chamber. It entered into force in January 2021. As a result, the HOAI could remain nearly unchanged, apart from the binding minimum and maximum fees since neither the performance plans nor the fee rates were subject of the proceedings. The latter can now serve as a recommendation and orientation. The fee depends from now on the agreement between architect and client. It is however possible to take the regulations of the HOAI as a basis. It is possible to agree parts of it or the whole HOAI. In case that there is no or no valid agreement on the fees, the minimum fee rate of the HOAI is deemed to have been agreed (see for more details here.)
With the contribution of Brigitta Bartsch, Head of Office EU Liaison Office Federal Chamber of German Architects.