Construction costs/architects significantly exceeded, who is liable?

Hello everyone,

We have been planning our renovation for over a year now. It is a two-family house from the early 60s, where my parents live in the ground floor apartment and my husband and I live in the attic apartment. We now want to combine our attic apartment with the attic space and partially expand it. In addition, the construction of a double garage and the insulation of the entire house were planned.

The plans were completed by the architect and approved by us, then a cost calculation was carried out (based on these tables, which determine the average values per unit/trade, unfortunately I just forgot what they are called). We arrived at planned costs of 220,000 EUR excluding architect fees. With this plan, we then went to our bank and had an offer made, just to be safe for 250,000 EUR (including equity), because in a renovation you are sure to find this or that. In addition, the garage (approx. 25,000 €) and full insulation (approx. 20,000 €) do not have to be built primarily, so this money would also be available as a buffer. After the bank gave the okay, it was clear to us that we wanted to tackle the project. The building application has meanwhile been approved, our apartment has been transferred from my parents to us, the loan has been applied for, so that we could start.

Now all the offers are in, and we are almost shocked: without garage and full insulation, we are currently looking at construction costs of approx. 225,000 € and that without any risk buffer! If I base this on our original plan (175,000 € pure expansion) this is so far a cost overrun of over 28%. Cancelling the plan is no longer possible for us without significant financial losses (first architect and structural engineer fees already paid, ownership transferred, prepayment penalties would be due).

Now my question: Can I hold the architect liable in any way for such a miscalculation? If we had known about these high costs beforehand, we would have completely abandoned the renovation.

I know that no legal advice can be given here, but a thought-provoking nudge in the right direction would be appreciated.

Thank you very much, best regards Maike

If you have contractually agreed on a limit beforehand, as far as I know, the architect must also ensure that it fits. If he has given you a price guarantee, an architect also has insurance for that. But a certain degree of inaccuracy must also be allowed to the architect. Although I think that 28% is too much.

I think he needs to take another look and see where costs can be saved. I also think you need to be willing to compromise. But the best option is still advice from a construction law attorney.

Although individual courts have accepted higher tolerance values in individual cases, an exceedance of up to 30% is generally considered permissible for the cost estimate (most recently OLG Stuttgart, OLGR 2000, 422). However, only 20–25% are considered permissible for the cost calculation, and even only 10–15% for the cost quotation (OLG Cologne, BauR 2002, 978). Whether such tolerance values can be taken into account in favor of the architect at all depends in particular on the underlying architect contract. If the cost ceiling for construction costs is precisely defined there by a quality agreement, this leads to liability of the architect in the event of an exceedance, since in such cases he cannot rely on a tolerable exceedance.

A quote:

Tolerance limits for construction sum overruns

Construction sum overruns can constitute a breach of duty by the architect leading to liability, which may result in significant fee reductions or claims for damages.

According to HOAI and DIN 276, a cost estimate must first be prepared, which at the beginning of the construction project is naturally still associated with numerous uncertainties. Service phase 3 later requires a more detailed cost calculation. As the construction project progresses, a calculation based on the cost quotation must finally be prepared in service phase 7. Within the framework of cost control, the architect is also obliged to compare the individual calculations. It should be noted that the requirements for the accuracy of the calculations increase as the construction progresses. The tolerances accepted by the case law are highest for the cost estimate and lowest for the cost quotation. Percentage "rules of thumb" exist for tolerance limits in cost estimation, calculation, and quotation, but these should be treated with some caution. Although individual courts have accepted higher tolerance values in individual cases, an exceedance of up to 30% is generally considered permissible for the cost estimate (most recently OLG Stuttgart, OLGR 2000, 422). However, only 20–25% are considered permissible for the cost calculation, and even only 10–15% for the cost quotation (OLG Cologne, BauR 2002, 978). Whether such tolerance values can be taken into account in favor of the architect at all depends in particular on the underlying architect contract. If the cost ceiling for construction costs is precisely defined there by a quality agreement, this leads to liability of the architect in the event of an exceedance, since in such cases he cannot rely on a tolerable exceedance. Therefore, such provisions should be avoided in any case. The architect may also be denied the right to rely on a generally minor exceedance if, for example, "gross" errors were made during the cost estimate. This shall be the case, for example, if completely unrealistic cubic meter prices were used or if the value-added tax was forgotten. However, tolerances must be taken into account if the client subsequently expands the scope of the construction project according to the specification of the construction cost ceiling (OLG Düsseldorf, NJW-RR 1999, 1496). This situation often arises simply when the client subsequently decides to use higher quality materials. If the client demands subsequent changes and this leads to an increase in construction costs, the architect has a duty to inform. To be on the safe side here, you should always point out the increasing costs in writing in the case of later client change requests and have this signed by the client.

It is important that a claim for damages by the client due to construction sum overruns can only be considered if the client has previously set a deadline for the architect to remedy the situation and this has expired without result. This means that the client must give the architect the opportunity to reduce the construction costs by "replanning" or new planning as long as this is possible. However, the client must also have an increase in the market value of his property credited to him, which results from the more expensive construction, which can reduce the alleged damage of the client almost to zero. Regarding remuneration, the following applies in principle to construction sum overruns: If the construction costs have been exceeded, the architect can only calculate his fee based on the too low estimated construction costs. However, a permissible exceedance that remains within the tolerance range can also be taken as a basis. If the architect fulfills the duties currently imposed on him by HOAI (i.e., cost control by comparing cost estimate / cost calculation and cost calculation / cost quotation) and informs or warns the client in good time in the event of an increase in construction costs, he can of course include the increased construction costs in the calculation of the remuneration claim without any problem.
no idea if this really fits, but apparently there are also court rulings on this now.

We arrived at planned costs of 220,000 EUR excluding architect fees. ................ to be safe, immediately for 250,000 EUR (including equity), ...............Offers: construction costs of approx. 225,000 € ......................assuming the original plan (175,000 € pure finishing) ..............cost overrun of over 28%.

.. sorry .. well somehow I don’t understand these numbers

@ The Da: Thanks already for the info, I need to take a closer look at it and maybe we will have to make another appointment with the architect, and if he is not cooperative somehow, we should consult an expert in construction law.

@ Bauqualle: Yes, maybe it really isn't that easy to understand. Here's another attempt:

Plankosten 220,000 € (pure interior finishing 175,000€ + new garage construction 25,000€ + full insulation 20,000€)

Costs according to offers 270,000€ (pure interior finishing 225,000€ + new garage construction 25,000€ + full insulation 20,000€ although we haven’t yet obtained any offers for the garage and insulation, since financially that is not possible at the moment.)

For our planning, we assumed from the start that we would need capital of 250,000€, since we also need a new kitchen, might want the more expensive flooring, and so on. Also, in a renovation, some unpleasant surprises may still be expected. So we planned 30,000€ more right away to be a bit more flexible.

I hope the numbers are somewhat clearer now?!

.. and why is the architect's construction cost planning significantly exceeded when you had already calculated 250 K + 30 K = 280 K Euronen