Construction obligation by bank or municipality? Land purchase contract

Good evening,

as mentioned above, the question relates to the building obligation. In our sample purchase contract for the property, it is stated that we commit to building a ready-to-move-in single-family house within 18 months from the start of construction readiness. We find the timeframe quite ambitious. We also wonder whether the bank marketing the property can even include such a clause in the contract or whether this clause has any relevance at all – § 176 of the Building Code specifically names the municipality.

Does anyone have experience with this? Should I contact the municipality regarding this?

Thank you very much for your help!

The municipality will have determined this during the preparation of the development plan to prevent speculation. The selling bank will simply have to implement this and will have no choice. Karsten

Why should the bank require this clause? Does only the bank take over the marketing or is it the owner?

Usually, such clauses go back to the municipality and are based on the fact that one does not want speculators and buyers in such a development area who purchase plots as an investment or stockpile for later.

If one is not finished within the 18 months, but it can be seen that the house construction is progressing, no one will probably complain if it then takes 6 months longer (for whatever reasons).

A bank or a private seller have no interest in such clauses, but I do not know to what extent the municipality can intervene with private sellers.

Why should the bank require this clause? Does only the bank handle the marketing or is it the owner?

In our case, the bank is the owner and also markets the plots accordingly. The bank also argues exactly as you say... that they have no interest in speculators. Nevertheless, we are dissatisfied with the 18 months, since in the current times it is quite possible that a trade might take a bit longer due to a "fully booked schedule".

Is it even legally possible to include such a clause in the contract, although the Building Code itself only refers to the municipality?

Many thanks for the quick responses!

Just don't be too pedantic. Practically, it is irrelevant unless you plan to start construction only in years. They also want to complete the final road construction quickly in new development areas, etc.

It depends on the exact wording.

In general, a house construction start is limited in time. In your case, the clause is probably somewhere in the middle?
What is the correct wording?