Building Contract

2023 Author: Hannah Pearcy | [email protected]. Last modified: 2023-11-26 11:39

Building contract: ensuring punctuality and quality

If the work is protracted, if there are suddenly additional costs, if botched up the construction, the building customer can put pressure on him - if he has the right contract. But he won't get it if he simply signs the form submitted by the company. The customer must check this point by point and renegotiate if necessary.

Binding completion dates

The contract includes binding dates for the start of work and completion - with date. According to the VOB (terms and conditions for construction work), appointments are only binding if this is expressly stated in the contract. If the deadline is missed, the company is liable for damages. The following rules should be observed: amount per working day 0.2 percent of the total order, for the total delay no more than five percent.

Fair payment schedule

A good payment plan takes into account the interests of both contracting parties: the entrepreneur does not have to wait for his money after work, but the customer does not make an advance payment either, because he loses an important means of pressure to perform on time. Therefore payment in several installments according to construction progress. The broker and property developer regulation provides an orientation: 40 percent of the contract sum after structural work and carpentry work, another eight after roof areas and gutters and so on.

Security for the client

An effective means of exerting pressure on botch-up on the construction site is the agreement of a security deposit of five percent on each installment payment, as well as five percent on the final invoice amount until the warranty period expires. Another guarantee option is a guarantee. Although it acts less as a leverage, it protects against loss of claims due to construction defects due to the company's insolvency. Caution: With the VOB contract, the guarantees expire after two years, even if the warranty runs even longer.

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Negotiate better

House providers often demand a bank guarantee from construction customers as security for their payment. "We urgently advise you to negotiate the clause out of the contract," says Gabriele Heinrich, "it is not necessary for the building contractor and costly for the building customer." To do this, he has to pay one to three percent of the guarantee amount annually. The entrepreneur, on the other hand, is adequately secured by submitting a free financing confirmation from the credit institution or the loan agreement.

Legislative amendment to building contract law

With its resolution of March 9, 2017, the Bundestag initiated the long-awaited reform of construction contract law. "The amendment to the law is a great success for consumer protection," explains Peter Mauel, first chairman of the Bauherren-Schutzbund eV (BSB). In the future, the new law grants consumers a right of withdrawal when concluding construction contracts and thus protects them from hasty decisions - a milestone in improving consumer protection. In addition, companies now have to make binding statements about the completion time of the construction, which leads to more planning security for private builders and buyers of residential property. The inclusion of a precise building description in the building contract also creates more transparency. In this way, consumers can compare different offers and make an informed contract decision. The clauses limiting the installment payments and handing over building documents also strengthen the position of the building owners and reduce their legal and economic risks. Despite the successful progress and the comprehensive new regulations, some problems remain unsolved. It is therefore not understandable for consumers that the legislator does not grant them the right to report serious defects to the construction company during the construction phase. Instead, they have to wait until the building is approved. Difficulties can also arise if the company goes bankrupt. So far, there is no entitlement to a special termination right to complete the construction with another company.“The complete regulation of property developer contract law still does not exist. In future, more security will be required for consumers here, for example in the event of the reversal of a property developer contract,”says Peter Mauel from the Bauherren-Schutzbund eV

Check the purchase contract carefully

Everyone wants the customer's quick signature, but "he often pays a high price if he can be nailed down without a thorough examination of the offer, contracts and financing," warns Gabriele Heinrich, Managing Director of Wohnen im property eV, "this shows our consulting experience."

Pressure medium reservation agreement

Prospective buyers often sign so-called reservation agreements in advance of real estate transactions. For this, brokers or property developers usually charge a so-called reservation fee. What looks like the customer is gaining time for a quiet review of the offer is actually more of a leverage. However, clauses on reservation fees are legally ineffective, the Federal Court of Justice decided (III ZR 21/10). This means that despite the signature, the building customer does not have to pay.

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Time brake two-week period at the notary

According to the law, the building customer should have property and real estate purchase contracts, which must be notarized, examined two weeks before the notary appointment. Some notaries refer to this deadline in the draft contracts, others provide information verbally. Nevertheless, "in the experience of living in property, this consideration period is still too little known among construction customers," says Gabriele Heinrich. But only if consumers know their right to pause for thought can they enforce it. This is necessary because the notary "should" press for it, but if he fails to do so, the contract is still effective.

Use the time

14 days is not much time to decide to buy a house, but enough to answer the most important questions. If you have any questions about the understanding of the notary contract or the meaning of individual clauses, you should first make a separate appointment with the notary and have the contract explained to you. This instruction is one of the notary's obligations in connection with the certification, so it does not cost extra. Under no circumstances should laypersons not ask their questions until the certification date, because under pressure of time and without time to think it is difficult to think about changes and alternatives.

Text: living in property eV

Photos: lbs

Old buildings: Check the structure before buying

If you want to buy an old building, you should know exactly which points to look out for before concluding the contract and which costs and work can come your way.

Allow construction errors

Old houses often have flaws typical of their construction time. For example, buildings around 1900 have steel profiles as lintels or balcony beams that can now rust. Accordingly, one should take into account cash reserves for renovations - the cost of houses built before 1930 can reach almost half the purchase price. There are structural defects, age-related damage, often in the bathroom, kitchen or on pipes. Typical component expiration times: roof tiles last 80 years, as does the roof structure. Waste water pipes have to be replaced after about 80 years, power lines and exterior plaster after 30 to 50 years, gutters after 30 years, heating after 15 to 30 years.

Consult building experts

However, a layperson often does not recognize defects or their signs, such as a roof structure gnawed by insects or waterlogging in the basement wall. And he can hardly judge what follow-up costs bad insulation or drafty windows will have. It is worth taking a construction expert along with you, for example a consultant from the modernization company or from the Association of Private Builders.

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Also check the property

Anyone who visits a house must also take a close look at the property. The check includes factors such as high water table or near watercourse, which may require protection against flooding or dammed up water. The development plan can prescribe limit distances, important for extensions, but also for a garage. Further questions: Is an increase possible? Are there rights of way? Is the garden overgrown and has to be rebuilt? But when your heart and mind are finally convinced, nothing stands in the way of your purchase.