Construction contract/payment schedule ok?

Hello dear forum community,

I am new here and hope that I am placing the post correctly.

We also want to build and now have a sample contract at home and are pondering over the payment plan...
The intermediary even gave us two variants.

I am not quite sure if the steps up to the sealed shell are okay?
Can you take a look at it??

Section 1 (payment of the three points together)
3% after completion of the floor plan drawing with (views and section drawings)
4% after completion of the building application or the building notification including structural engineering
3% upon building permit or fee notice from the building authority
=10%

Section 2
16% after completion of the building drainage, base/foundation
13% after completion of the exterior walls and interior walls on the ground floor without facing
= 29%

Section 3
8% after completion of the facing on the ground floor - without window sills
7% after completion of the facing on the upper floor without window sills
= 15%

Section 4
13% after erecting the roof truss
4% after completion of roofing and plumbing work
=17%

Section 5
4% after installing the windows and exterior doors (without sealing and fine adjustment)
3% after completion of the rough electrical installation
3% after completion of the rough sanitary installation
=10%

Section 6
3% after completion of the drywall construction
3% after completion of the plastering work
=6%

Section 7
3% after completion of the rough heating installation
3% after laying the screed
2% after laying the tiles
=8%

Section 8

2% after completion of the heating and sanitary installation
1% after completion of the electrical installation
= 3%

Section 9
1% after installing the interior stairs
1% after assembling the interior stairs
=2%

So, that was it...
What do you think?

Many thanks in advance for your time and help!!!!

I find it already very high what the contractor wants to charge for the shell construction. My suspicion is 1. He wants to get as much money as possible before work begins that even a layperson can assess. If you withhold payments from section 5 due to alleged / justified defects, the contractor immediately stops all work. He already has more than he needs for his services. 2. He constantly works with changing subcontractors, whom he then pays only slowly or not at all. A large company that starts with I and has a particularly bad reputation in southern Germany immediately comes to my mind.

Hello, to better assess the payment schedule, a few more details would be helpful:
- Living area?, Offer price? with or without basement?, Construction of exterior walls (insulation?), Ratio of solid walls to drywall partitions, Assignment of roof insulation

Nevertheless, for general orientation, it can be noted that: Upon reaching the completion level of a sealed shell including windows and planning, a billing of about 60% of the total services is reasonable - for an average single-family house. If a lot of technology is planned in the house (e.g. heat recovery etc.), a lower proportion until the closed shell can also be appropriate.

I assume you are considering a house without a basement, traditionally with a ground floor + attic as a gable roof. Please understand my following assessment only as a rough guideline:

Section 1 - Planning including building permit
10 % - still acceptable
Section 2 - Main pipelines, foundation, solid walls
29 % - okay if the ceiling is included and not too many drywall partitions are planned
Section 3 - Facing (wall structure not exactly known, facing bricks as thin bricks?)
15 % - seems clearly too high to me - 10 % possibly more appropriate
Section 4 - Roof frame and roof covering
17 % - seems too high to me - 10-12 % more appropriate, depending on complexity (dormers etc.)
Section 5 - only item 1 - installation of windows and exterior door - 4 %
adds up to so far - that is closed shell - a total of 75 % - this is clearly too high, even if the facing is already included.

All subsequent points are therefore rated rather low, since in my opinion other services are overvalued beforehand.

It is risky that no final installment after acceptance is named; this should be at least 3 % and apply only to acceptance/hand over. In addition, I recommend paying attention to a completion guarantee, which must be provided at the beginning, at least 5 % of the house price.

Hello,

The agent even gave us two options.

From one and the same provider?

Section 1 (payment of the three points together)
3% after completion of the floor plan drawing with (views and sectional drawings)
4% after completion of the building application or building notification including statics
3% upon building permit or fee notice from the building authority
=10%

If all 3 are only to be paid after submission of the building permit, that is okay. Otherwise, the first payment should be due when the building application is submitted and filed.

Section 2
16% after completion of the building drainage, base/foundation
13% after completion of the exterior walls and interior walls on the ground floor without cladding
= 29%

Section 3
8% after completion of the cladding on the ground floor—without window sills
7% after completion of the cladding on the upper floor without window sills
= 15%

Section 4
13% after erecting the roof truss
4% after completion of roofing and plumbing work
=17%

Section 5
4% after installation of windows and exterior doors (without sealing and fine adjustment)
3% after completion of electrical rough installation
3% after completion of sanitary rough installation
=10%

Cladding included; therefore, a deviation of up to max 10% upwards from the correctly noted max 60% by baucoach for a closed shell construction is allowed.

Section 6
3% after completion of drywall
3% after completion of plastering
=6%

Section 7
3% after completion of heating rough installation
3% after laying the screed
2% after laying the tiles
=8%

Section 8

2% after completion of heating and sanitary installation
1% after completion of electrical installation
= 3%

Section 9
1% after installation of the indoor stairs
1% after mounting the indoor stairs
=2%

So, that was it... What do you say?

I don't like the payment plan. Not because of the slight overpayment at the closed shell including cladding (75%), but because it is front-loaded and contains too few payment steps. In my opinion, it doesn't matter what type of single-family home it is.

My recommendation: if the builder is willing to agree, change the payment plan so that a.) more payment steps are inserted according to construction progress and b.) higher rates are also to be paid in the last third of the construction contract. For example like this:

06% - after submission of building application
06% - upon issuance of building permit
10% - after completion of cellar floor/slab
10% - after completion of ground floor walls
10% - after completion of ground floor ceiling
05% - after erecting roof truss
05% - after roofing
05% - after installation of windows/glass
10% - after rough installation of electricity, sanitary, heating
07% - after completion of interior plaster
10% - after application of exterior plaster or cladding
10% - after fine installation of electricity and heating, stairs
03% - after installation of tiles, interior doors
03% - after handover or acceptance, at the latest before use of the
property by the client

Important in this context are, of course, the other contractual components; the payment plan isolated highlighted says nothing about the quality or securities which your builder offers you.

Only in the overall consideration of all contract documents and their independent review should you make a decision for or against!

Kind regards

1000 thanks for your help!!! It’s really great to be able to exchange a bit!

Hello,

From one and the same provider?

yes, they seem to have been rejected quite often... Or is it normal to be offered two payment plans?

This one is less detailed:

1. Construction phase building permit 6%
2. Construction phase foundation 15%
3. Construction phase load-bearing ground floor masonry 20%
4. Construction phase roof (framing) 15%
5. Construction phase rough electrical installation 6%
6. Window installation 14%
7. Construction phase interior plaster (without finishing plaster) 10%
8. Rough heating installation 7%
9. Construction phase screed installation 5%
10. Construction phase house handover 2%

Bauexperte, I still like your plan better.

I find it already very high what the builder wants to charge for the shell.
My suspicion is
1. He wants to get as much money as possible before work begins that even a layperson can assess. If you do not make payments from section 5 onward due to alleged/justified defects, the builder immediately stops all work. He already has more than he needs for his performance.
2. He works with constantly changing subcontractors whom he then pays only slowly or not at all. One big company comes to my mind right away, starting with I, which has a bad reputation especially in southern Germany.

So this provider is definitely not it
But we are also not satisfied with the plan. 70% is too much for us and the zero installment upon handover really bothers me.

Details: 130 sqm, gable roof with dormer, brick facade. Price 145,000

By the way, aren’t the 5% completion guarantee legally required??

1000 thanks for your help!!! It’s really great when you can exchange ideas a bit!

Hello,


From one and the same provider?

yes, they seem to have encountered rejection more often... Or is it normal to be offered two payment plans?

This one is less detailed:

1. Construction time building permit 6%
2. Construction time foundation 15%
3. Construction time load-bearing ground floor masonry 20%
4. Construction time roof (raising) 15%
5. Construction time rough installation electrical 6%
6. Window installation 14%
7. Construction time interior plaster (without finishing plaster) 10%
8. Rough installation heating 7%
9. Construction time screed installation 5%
10. Construction time house handover 2%


Bauexperte, I still like your plan better.

I find what the builder wants to charge for the shell construction already very high.
My suspicion is
1. He wants to have as much money as possible before work begins that even a layperson can assess. If you withhold payments from section 5 onwards due to alleged / justified defects, the builder immediately stops all work. He already has more than he needs for his performance.
2. He works with constantly changing subcontractors, whom he then pays slowly or not at all. One big company comes to mind, starting with I, that has a particularly bad reputation in southern Germany.

So it’s definitely not this provider
But we are also not happy with the plan. 70% is too much for us and the fact that there is no installment at acceptance really bothers me.

Details: 130 sqm, gable roof with gable, clinker bricks, solid construction. Price approx. 145,000

Tell me, aren’t the 5% completion guarantee legally required??