Assignment Declaration of Credit

And what is your question?

Rhineland greetings

Is the general contractor allowed to stop construction without notice? Especially if I use the documented defects from the Association of Private Builders as a reason for withholding payment and have offers/ cost estimates for the renovation.

Greetings from Hesse

Hello,
I just read the thread here ... In our construction contract it states that: "The client hands over a financing confirmation to the contractor and their credit institution makes the payments according to the payment plan. The payments are made after they become due; the client is in default if the payment is not credited to the contractor within 6 working days after the due date." My lawyer and my advisor from the Association of Private Builders both checked this and found nothing unusual, except for the payment plan, where I am at risk of overpaying quite quickly.

Since the term construction stop / construction interruption came up earlier, I have a question about that. At my construction site, not much is happening right now – the reason being I have stopped the payments a) missing functional potential equalization/foundation earth electrode, b) defective or wrongly delivered pipe of the underfloor heating, c) incorrectly installed distributor of the underfloor heating (it is in the middle of the room), d) wrong manufacturer or brand of the floor slab system, e) the surface of the floor slab is not power-trowelled and shows significant unevenness, f) negative slope in the ground-level shower floor, h) poorly sealed windows, i) installation of the roller shutter motors not professionally done, j) significant damage to the exposed beam ceiling, k) poorly sealed or not sealed at all base of the building – all documented by the Association of Private Builders supervisor... For almost three quarters of a week now, no performance from the general contractor is coming with the justification - we have withheld too much ... We got several offers for the rectification of the defects and that comes to a pretty high sum – if I now also consider the problem of the forgotten foundation earth electrode / functional potential equalization that can no longer be regulated – surely there will be a loss in value added?

Oh, and I forgot, according to my expert, the ring earth electrode is also defective

I don’t understand: how can one criticize the floor slab if the screed is already on top?

Regarding your question: of course, the general contractor can initially stop the work. He even must... If something is complained about, in practice that must first be fixed before the work continues. This can then take a few days to weeks until the defect or error is corrected by the responsible trade.

However, the identified construction defects should be submitted in writing and the general contractor should be given time to fix them.

I wouldn’t speak of a construction defect during the construction phase anyway.

By the way, a construction stop is only ordered by an authority.

Our foundation slab is a thermal foundation slab - where the surface should be ready for covering, achieved by smoothing with the machine.

The general contractor was given a deadline by us to eliminate the defects by April 28 ... plus an extension, as he could not obtain parts for the distributor of the underfloor heating on the ground floor.

Unfortunately, to date he has not corrected a single "defect" to the satisfaction of my construction supervisor. And he was last seen on the construction site by subcontractors on May 18. They have now informed me that they cannot continue working due to missing preliminary work by the general contractor. I called him about this and he then said or sent me in writing (June 10) that he is carrying out the work stoppage (since May 18) due to the withholding.

Shouldn't he have notified me of this beforehand so that I could react accordingly?

Hello,

I am not allowed to provide legal advice here, as this is exclusively the domain of consulting professions. Therefore, please understand my answer as a "personal opinion."

Is the general contractor allowed to stop construction without notice?

Yes, you have breached the contract unilaterally by not transferring the due payment for services rendered.

especially if I use the documented defects of the Verband Privater Bauherren as a reason for withholding payment and have offers/cost estimates for the renovation.

Offers for renovation do not interest anyone at first, because your contractual partner has the right to remedy defects. Only when a reasonable deadline passes without result may you commission a third party!

Unfortunately, you have an unfortunate combination of circumstances: on the one hand, a lawyer you engaged and a Verband Privater Bauherren advisor, and on the other hand, a general contractor who presumably made mistakes. In such situations, it is not uncommon that the problem is recognized but the willingness to develop solutions is neither visible nor present; all the more so if the owed payment for services is withheld. It is necessary for the parties to sit down at a table and talk... talk factually... talk problem-oriented... without mutual accusations; the goal is not to search for problems but to solve them.

From my point of view, your Verband Privater Bauherren advisor bears a special responsibility; I hope he can hold back? In my opinion, he _must_ act as a mediator, not construct threats with a wagging finger. He should take the pressure out of the situation, find a common _language base_ with your general contractor, and equally, you need to hold back. Because –

a) missing functional potential equalization/foundation earth electrode
is bad, no question, but not unsolvable

Everything else reads more like a slogan, in the typical vocabulary – if you have not formulated it yourself – of an association expert. Not exactly motivating for discussions, but by no means unsolvable.

Conclusion: the better educated, professionally and life-experienced the Verband Privater Bauherren advisor is – the higher the chance to complete the contract as owed and not have to settle opposing positions in lengthy court proceedings. Keep in mind – in house construction, parties always meet before the regional court… that takes time… costs a lot of money/nerves/time and usually ends in a settlement.

Best regards from the Rhineland

I owe the construction company an irrevocable and indefinite financing confirmation or bank guarantee. Why should the construction company terminate my contract?

If I cannot provide a financing confirmation, then a bank guarantee must be provided.

Yes, but not an "assignment." The dilemma is that you don't need an FC and you don't get a bank guarantee, in other words: you cannot fulfill the contract. Which gives the general contractor the right to terminate the contract – but according to construction experts, this doesn’t bring him much besides trouble and losses.

Therefore, I would show the general contractor the savings book and hope for understanding. After all, it is not forbidden to have 100% equity capital.

Best regards
Dirk Grafe