Home construction company stops working - Continue alone, but how?

Good day everyone,

our house construction company informed us yesterday that they do not want to continue building. Only against a one-time payment of an additional 18% of the total construction sum, including the 70% already paid in installments, they would continue without offering any guarantees. The contractually agreed construction period expired in mid-June. Alternatively, they would offer us a contract termination.

We will clarify how strong our legal position is and what the right reaction is with our lawyer tomorrow.

But now we face the problem that, most likely, no matter how things proceed, we will not continue building with our contractor and have to prepare to carry on ourselves.

This naturally leads to a lot of questions and a huge, seemingly insurmountable wall in our minds. The perhaps most important question for us: will we manage it, and if so, how do we cover the remaining budget, when the construction company told us that nothing can be done with the remaining approx. €74,000 and that an additional €45,000 would be needed to finish building.

Of course, we are willing to contribute as much as possible through our own work.

Currently, we have a shell with windows, front door, and a roof covering. On the ground floor, the bitumen welding membrane has been applied to the floor slab.

What we currently have in mind and what still needs to be done are:
- the insulation on the floor slab and in the roof,
- the rough electrical installation,
- the purchase and installation of the LWW pump, as well as laying the underfloor heating,
- the rough sanitary installation,
- the interior and exterior plaster,
- the screed,
- the final installation of electrical and sanitary systems,
- the interior doors,
- the floor and wall work,
- and the installation of the stairs.

Have we overlooked anything important? How would you continue planning in our situation?

That does not look good at all. For 74k, I also don’t see a complete interior fit-out plus exterior plaster; almost all of it goes for the materials. Unfortunately, you have massively overpaid. The big question now is the creditworthiness of the construction company. Is there a possibility to claim corresponding deductions in case of contract termination, or is it to be assumed that in this case the company will simply go bankrupt?

The head of the construction company presents himself as bankrupt. Whether that is true we do not know. We hope to receive a plan from the lawyer tomorrow. Besides the €74,000, there are of course still, for example, funds for outdoor facilities and a buffer that can be converted, but definitely no more than €45,000. However, we currently cannot even roughly estimate what would come our way. A few more facts about the house: semi-detached house in Berlin, approx. 113 sqm + approx. 30 sqm expansion reserve in the roof.

Duplex house means there is a second affected party? I read the construction company's strategy as insolvency delay, which is punishable, and in which I would see you at risk of complicity through the requested special payment. Is the company here [GU] or [BT]?

Yes, exactly. From the other half, €52,000 was demanded yesterday. The company operates as a general contractor, but only with subcontractors.

Yes, exactly. For the other half, €52,000 was demanded yesterday.

Are these 52k the same as your "18% on the whole plus 18% on the already paid 70%"? (I assume, wisely, that the halves were planned together and mostly identical)

The company works as a general contractor, but only with subcontractors.

So the plot of land is contractually unaffected, the company only had a construction contract? Hopefully the lawyer makes sure to request a formal termination offer from them and, upon its acceptance, does not carry out any "acceptances" of already completed construction services and deliveries. That means all that stuff should be your property, but without acknowledging it as flawless. From my point of view, everything suggests that the construction company is already in insolvency (delay). Laypeople often have the wrong idea that the time of insolvency is determined by the applicant – this is by no means the case; the legislator has clear criteria here. If it’s a pure mailbox general contractor without own staff, then at least no social insurances are affected here (unless the subcontractors are pseudo-self-employed). I assume that you are already creditors who should contact the provisional administrator as soon as the insolvency is announced. There is probably nothing left to gain, but the lawyer should keep that in mind (and hopefully is familiar with insolvency law).