Your clients must own the risk that goes with cost-cutting Benefit and risk should travel together

14 April 2023 by Jason Quinn

How is risk allocated in the design of new buildings? Who benefits and who pays for it? This is at the crux of some very interesting conversations I’ve been having recently with designers and engineers on multiple projects. Sustainable Engineering has recommended particular solutions that carry almost no-risk. Yet the client doesn’t want to pay for best practice solutions and prefers to take on a moderate amount of risk and have a building that is better-than-Code but less than great.

Let hypothetically consider a school classroom, which has very high internal moisture levels because there are lots of kids in a relatively small space. Best practice is a heat recovery ventilation system sized for the occupancy complete with CO² sensors. Everyone gets fresh air to breathe, there are big savings on energy used for heating and cooling and it’s more comfortable because draughts are avoided. All that, and internal moisture levels are controlled. 

But few classrooms are like this. The likelihood of grossly inadequate ventilation is especially high in winter. That impacts not just the comfort of students and staff but their ability to learn because high carbon dioxide levels make us sleepy and stupid*. High humidity levels are also bad for the health of the buildings.

Saving on capital costs by downgrading or deleting ventilation systems is your client’s privilege. There is a short term benefit for them: but is crucial that they accept the risk associated with that benefit. It’s essential, in my view, that architects, designers and engineers clearly communicate with clients that choosing sub-optimal solutions saves money but increases risk and both those things belong to them

Not informing the client—or expecting the design and engineering team to bear responsibility for risks resulting from clients’ choices—are both manifestly unfair. I suggest you deal with this via a simple contract assigning risk along with some documentation explaining those risks. That works in one scenario, such as building a classroom for a government department, which commissions the building and will own it for its whole lifetime. 

But what about a commercial or residential building that is on-sold on completion or even years later, that may have multiple owners over the building’s lifespan? The new owners do not have a contract with the original design team. The risk is passed on with the building, but the money saved by skimping on capital costs likely isn’t. The risk may not be visible to the new owners (think about unwitting early buyers of leaky homes if you want an extreme example). 

And then there are the clients who care only about costs (ok, maybe they care about some cosmetic finishes and maximising their home’s footprint). They are willing to accept significant risks to save even a small sum, although your average homeowner is unlikely to understand the cost benefit analysis. As above, this may be their prerogative as a person forming a contract with a designer (more likely a group home builder) but buildings almost always outlive their original owners and someone else will have to deal with the consequences of initial cost-cutting decisions.

This is why we have a Building Code. Essentially, this regulation is a social agreement on the minimum acceptable standard. This is literally true: if you build it one tiny fraction worse than Code, it’s illegal and you can’t sell it or live in it. (Sadly, many conventional builders persist in seeing the Code as a target to aim for.) As building science develops and we better understand the costs and benefits of our collective choices, it’s appropriate to upgrade the legal minimum standard.

The challenge is to explain risk to the client and have them understand and accept it. Easier said than done but it’s essential, especially as more buildings are designed to be better-than-Code but still not as good as they could.


* See the references section of this article for examples of studies showing this connection.

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