Additional costs in a general contractor contract

Hello stanger,

what exactly does fixed house price mean? What applies is what you signed, it is best if you put the corresponding passage here, then more can be said. If extreme cost increases threaten even before the start of construction, without you having redesigned or changed the house, it was probably the cheapest provider commissioned, who now wants to recoup his profits in this way, or according to which criteria did you select this provider?

We have a work contract with a fixed flat rate for the building. Then the usual additional costs are listed, which are estimated in the brackets: 1. preparatory work, 2b) additional building costs (heating costs during the construction phase, construction electricity, installation of LS basement, etc.), then 4. surroundings and 5. ancillary construction costs.
Under the ancillary construction costs, the building permit costs were over 50% higher than budgeted. And for the first two items of the master builder’s work for the surroundings, the costs are now again 17% more expensive than budgeted. These are several thousand francs, and we are already well over budget.
We are pretty stuck now.
Thank you.

Hello stanger,

Often the lump sum price is also referred to as a fixed price, but this regularly leads to misconceptions. The lump sum price is, in the absence of other agreements, a "fixed price" only in the sense that it is not changed by external circumstances such as inflation, wage increases, or material price increases. However, it is quite possible to agree on price escalation clauses for such circumstances in a lump sum contract, which then makes the lump sum price a "sliding price." The assumption that a lump sum price is a fixed price in the sense that all changes or additional wishes of the builder are already covered by the lump sum price is wrong. Such a "fixed price" does not exist. Therefore, the final total price can easily be 30% above the original lump sum price even in a lump sum agreement.

Since the price increases you describe result from only estimated ancillary costs (with an estimate one can easily be off by 100%, as long as the total price for the house looks nice and low on paper ;)) you will not be able to do much about it.

Since you live in Switzerland, you should ask this question again for safety in the Swiss forum.

If you answer my question about your selection criteria for your general contractor, perhaps other builders can still learn something and avoid costly mistakes.

Hello thank you very much for your explanations. This is a severe disappointment for us and we will certainly face greater financial problems as a result. We do not yet know what other "over budget" costs will arise from the further work. :mad: Thank you and regards