Contract for work with financing clause

Hello everyone,

in order to secure the start of construction as early as possible, preferably still this year, and to participate in a limited-time promotion by the house-building company ([KFW-55-Haus] instead of [KfW-70-Haus] for the price of the [KfW-70-Hauses]), our consultant offered us to conclude a contract for work with financing and land clauses.

The financing clause reads as follows:
"Furthermore, the client has the right to withdraw from this contract free of charge until [Datum] if the financing is not finalized by this date. The contract for work, initially suspended and ineffective, will automatically become effective after the expiry of the period mentioned in the previous sentence. The client will actively pursue the financing efforts. The client undertakes to declare the withdrawal to the contractor in writing."

Is such a clause common and unproblematic, or rather counterproductive, since one is dependent on the financing anyway and might then have to expect higher conditions?

Thank you very much for your answers!

Hello,

to secure a start of construction preferably still this year and to participate in a limited-time offer from the home construction company (KfW-55 house instead of KfW-70 house for the price of the KfW-70 house), our consultant offered us to conclude a contract with financing and land clauses.

It has been written here many times: NO provider gives anything away for free, and I can hardly believe the KfW 55 offer is price-neutral compared to KfW 70, as depending on the construction system, we are talking about additional costs up to the five-figure range.

Is such a clause customary and harmless or rather counterproductive, since you are definitely dependent on the financing and may have to reckon with higher conditions?

In certain situations, it is helpful for the "gut feeling" of the builder to have such a clause included in the contract; in some cases — such as with public funds — it is even mandatory for the contractor. Which of these applies to you, you have to answer yourself. You have to pay attention to the date to be entered — consult your financier before signing about what deadline seems appropriate to them. If the right of withdrawal — exactly as described — is then included in the contract, I see no problems — the seller will be pleased.

In general, I do not think much of such an approach and advise — except for handpicked exceptions — against signing under time pressure. If all goes well, you will live in your house for many years; a few weeks should not be the reason to fail beforehand.

Best regards

The passages seem familiar to me?

To me, it reads like the Rensch-Haus contract for work.

Is it by any chance their anniversary promotion?

Hello,




In certain situations, it is helpful for the "gut feeling" of the builder to have such a clause included in the contract; in some cases - like public funds - it is even mandatory for the contractor. Which one applies to you, you must answer yourself. You need to pay attention to the date to be entered - consult your financer before signing to see which deadline seems appropriate to them. If the right of withdrawal - exactly as described - is then included in the contract, I see no problems - the seller will be pleased

In general, I don’t think much of such an approach and advise - except for handpicked exceptions - against signing under time pressure. If everything goes well, you will live in your house for many years, so it shouldn’t fail over a few weeks in advance

Kind regards

Thank you very much for your answer! It has helped us a lot. We have not yet (initially) concluded the contract for work and prefer to clarify the rest (property, financing) safely and calmly first. After consulting our financial advisor, such a clause would not be a problem. However, when applying for public funds, it would have to be unlimited and could not have an end date (initially, 09/30/2011 was planned for us with the possibility of extension).

Best regards

Hello,

It has been written here many times: NO provider gives anything away for free, and I can hardly believe the KfW 55 offer is cost-neutral compared to KfW 70, since depending on the construction system, we are talking about additional costs up to the five-figure range

Unfortunately, I lack the experience to judge this. Presumably, the house provider recoups the money elsewhere (interior fittings or similar) to some extent. Or it is already partially factored in beforehand. The promotion also only ran for a very short time (2 months), so probably not many homeowners benefited from it, and the "loss" for the company is therefore limited...

The passages do seem familiar to me?

To me, it reads like the Rensch-Haus contract.

Is it by any chance their anniversary promotion?

Hello,

no, it is not the promotion from Rensch-Haus. But apparently it exists with several providers... Did you sign a contract with a clause?

Best regards