Are securities customary for completion and warranty?

Hello,

It is always recommended in literature and on the internet to withhold about 5% of the first installment when building with a developer/general contractor/general contractor (Bauträger/GU/GÜ) to cover the case that the company becomes insolvent before the construction is completed or the warranty period has expired. Alternatively, one should at least have corresponding guarantees issued.

Town & Country actually offers a completion bond on its own initiative. However, this does not seem to be the case with most companies. At least not automatically.
Should one insist on this during negotiations? Or will one then be searching forever for a suitable company because hardly anyone is willing to offer these securities? What is your experience, how far is practice on this point from reality?

The current general contractor of our choice (because of construction method, price, and sympathy) does not initially offer any securities and the final installment after acceptance is barely 1%. We definitely do not agree with this. We have not yet asked whether he is willing to negotiate on this.

And one more question afterwards: Is the completion retention to be paid when the house is finished or when it is "finished and free of defects"? It is apparently "finished" when the general contractor says "finished," not when the client has accepted it without defects?

It is currently a seller's market. The contractor will probably respond to the 5% retention with a work stoppage.
Guarantee. You want it, you will pay for it. That’s how it will be.
There remains Scanhaus Marlow Marlow, build first, pay later. But you also have to like Scanhaus Marlow Marlow...

was also offered to us as well, but they didn't take it. You pay anyway according to the progress of construction. So if the company goes bankrupt halfway through, you still have a (hopefully) defect-free house up to that point. From then on, you just have to continue. It will certainly become more expensive, but hopefully not so much that it knocks your feet out from under you.

If necessary, you grab your craftsmen (you should have a list by then) and continue working with them alone.

Well.... the concern is not unfounded. The payment plans can be nine times ten percent and twice five. Or even five times twenty. But then you also always pay in advance, not just what has already occurred. Still, life is never without risks. And you can also inquire about the creditworthiness of a company.

Yes, if he agrees to it. 9 times 10% plus twice 5, the last after final acceptance/defect rectification.