Costs in case of cancellation of the construction project

Hello,

my girlfriend commissioned a prefabricated house about a year ago. After some back and forth with the building plans and permits, construction work was supposed to begin in the winter. Now, for private and professional reasons, my girlfriend has decided not to proceed with building the house and has terminated the contract with the house building company.

Almost all the work done so far has been outsourced and paid for by my girlfriend herself. Now she has received an invoice from the house building company which only lists 3 hours of an engineer’s actual work. The largest items, however, are sales overhead costs and profit. Many items are listed with varying percentage shares, the profit actually at 100%.

Overall, the costs demanded by the construction company amount to 15 - 20% of the total price of the completed house.

She is currently quite distressed, which is why I am now trying to find out to what extent this is actually lawful and whether there are any possibilities to intervene.

It is by no means about trying to “cheat” anyone. It is obvious that she cannot get out of the contract free of charge. But such an incredibly high invoice with many fictitious costs, although almost no real work has been carried out so far and a 100% profit share, is hard for us to comprehend.

Can you help us and give advice?

THANK YOU!

What does the contract say about termination? It usually states what is then due.

I do not think the demand is unrealistic. She will have to pay damages, and these include, besides the services already provided, the lost profit (possibly minus risk). She can offer 10%. Maybe it will work. Less, however, is very unrealistic; possibly consult a specialist lawyer and go to court to gain full insight into the calculation.

She should have built it or at least sought advice beforehand! The bank will also strike again if she has already concluded a construction loan.

That she does not get out of the contract for free is obvious. But such an incredibly high invoice with many fictitious costs, although virtually no real work has been done so far and it is a 100% profit share, is hard for us to comprehend.

I don’t want to add to the criticism, but this is real estate. It is normal that a contract termination involves "incredibly" high costs. The exact amount can certainly be debated, but as a contractor, I want to receive both my profit and my overhead costs. After all, I maintain an entire operation.

Certainly legal - against the background that some construction companies are already trying to "buy out" their customers with five-figure sums, the amount is certainly worth questioning again. As far as I know, the contractor has to disclose their calculated profit. So, in other words, open up the cost accounting and prove it with corresponding current invoices for materials, etc. Depending on the exact age of the contract, I could imagine that a 15-20% margin on material prices would not have been achieved for the contractor, but I could be wrong, since some raw material prices are currently falling again. I would either withdraw the termination and go through with it (and then just sell or rent out) or go fully on the offensive. I wouldn’t just swallow it.

What does the contract say about termination? It usually specifies what is then due.

@TE: We are all basically waiting for the answer.