GU demands an unlimited guarantee from the builder

Hello everyone, we have signed a construction contract with Team Massivhaus. The contract agreement states that we have to provide an unlimited guarantee of 20% of the purchase price. If this is not possible, an alternative payment plan (progressive payment before completion of the trade) is offered. We definitely want to prevent this, because in the end no final payment of 5% is made, which could serve as security. Contrary to the assessment of our bank advisor, our financier does not offer a guarantee. Unfortunately, the builder's guarantee from R and V is also not an option, as it is limited to a maximum of 30 months and the developer insists on the unlimited guarantee. I am currently inquiring with our house bank and insurance broker. The financing bank has also created an assignment declaration for the general contractor, but this is also not desired. We would be very grateful for helpful comments or tips on where we can apply for such a guarantee. P.S. Yes, I know that this was not so great from the bank advisor, but unfortunately that does not help us now. We are now mainly interested in solving the problem. Best regards

Permanent contracts are the big problem. We don't do that either. Of course, this means you are taking a high risk, as your general contractor can call the guarantee at any time and indefinitely. One solution could be a cash-backed guarantee from a commercial bank. But you certainly don't have the additional capital just lying around...

No chance for permanent. So either cash or advance payment. The latter also carries risks and a bank must approve it. But such things are clarified beforehand or has nothing been signed yet?

unlimited guarantee of 20% of the purchase price

The companies are getting more and more cheeky. You need to be clear about what that means.

If you were to accept the assignment of the partial payment, then better take the payment plan with advance payment instead, without a guarantee.

Assignment of the loan disbursement means nothing else than: the general contractor decides when the construction stage is reached and when he calls up the money. You then no longer even have a veto right. So even if the roof is only half finished, the general contractor can demand the payment of the roof installment directly from the bank. This basically comes down to the same as if you pay in advance. With the advantage that he does not have the guarantee.