Is the due date for the 1st installment (earthworks) possible before the building permit?

Hello everyone,

in our purchase agreement (according to the real estate agent and property developer ordinance), the first installment of 30% is required after the start of earthworks.

Question regarding this: Could this possibly also be the case before the approval of the building permit?
Background: The (still well-interest-bearing) equity capital that must be used with the first installment has a notice period of 3 months, and I am considering when I actually need it. I don’t want the first invoice to arrive and not be able to access the money.

It is a large construction site that is being developed and built by a property developer. My feeling is that nothing can really be done before the building permit that would justify the first payment. Can you confirm this?

Normally, one waits until the building permit is granted, and only then may the earthworks begin.

Theoretically, however, the builder could also obtain a written partial building permit and start the earthworks during the building permit procedure. I don't know if that is possible in every federal state, but for example in BaWü you could do that (§61 Landesbauordnung BaWü).

§ 61
Partial building permit
(1) If a building application has been submitted, the start of construction work for the excavation pit and for individual structural parts or construction sections can already be approved in writing upon request in text form before the building permit is granted, provided that there are no objections to the partial execution based on the status of the examination of the building application (partial building permit). §§ 54, 58 Abs. 1 to 5 as well as § 59 Abs. 1 to 3 apply accordingly.

But to your actual question:
Besides, you do not know when the permit will be granted, right? It could be that the municipality is extremely fast and approves it within 1.5 months, so what do you do then? Then you have an invoice that you cannot pay.

It's best to ask the builder how long he expects the building permit to take and when he can then start the earthworks. From that I would subtract a safety buffer and schedule the termination for that time. Better to lose a little interest than to perhaps have to pay default interest to the builder later.

in unserem Kaufvertrag (nach Makler- und Bauträgerverordnung) ist die erste Rate in Höhe 30% nach Beginn der Erdarbeiten erforderlich.

The start of construction work can mean many things. It is enough if an excavator just moves a wheelbarrow of earth. And then the first installment is due. This is often done when the developer needs money.

Theoretically, the builder could also obtain a written partial building permit and then already start the earthworks during the building permit procedure.

That is a good tip. It seems to exist in Berlin as well.

But to your actual question:
Apart from that, you don’t know when the permit will be granted, do you? It could be that the municipality is extremely fast and approves it within 1.5 months, what would you do then? Then you have an invoice you can’t pay.

Well, we’re talking about Berlin. The last thing you have to worry about here are fast authorities. Currently, a building permit takes up to 3 months. I originally wanted to terminate the equity shortly after the notarized contract. I think that will be in 6-8 weeks, depending on how long the developer needs to provide the documents for applying for the financing.

You’d better ask the builder how long he expects the building permit to take and when he can then start with the earthworks. From that, I’d subtract a safety buffer and terminate at that point. Better to lose some interest than maybe paying default interest to the builder later.

Officially, the building application is only submitted after the sample selection, and that can take up to 12 weeks. My only concern was that some earthworks might also be carried out without a building permit. I will definitely ask again, but a legal regulation would of course be the safest.

Start of construction work can mean many things. It’s enough if an excavator moves just one wheelbarrow of earth. And then the first installment is due. This is often done when the builder needs money.

Well, it says start of earthworks. I will inquire with the developer and then decide whether to play it safe. Three months earlier or later means roughly ~1000 euros in interest lost to me.

As previous speakers have said, the installments should actually be due after the completion of [Gewerk XY] and not before. Otherwise, there is still the option to talk to the bank about what the money is needed for and whether there are possibilities to get the money faster, e.g. upon presentation of the invoice?!

That is a good point. It seems to exist in Berlin as well.

Well, we’re talking about Berlin. The last thing you have to worry about here are fast offices. Currently, building permits take up to 3 months. I originally wanted to terminate the equity shortly after the notarized contract. I think that will be in about 6-8 weeks, depending on how long the developer needs to provide the documents for applying for the financing.

Officially, the building application is only submitted after the sample selection, and that can also take up to 12 weeks. My only concern was that some earthworks could be carried out without a building permit. I will definitely ask again, but a legal regulation would of course be the safest.

Well, it says start of earthworks. I will inquire with the developer and then decide whether to play it safe. Three months earlier or later means, with the interest, about ~1000 euros that I miss out on.

Three months for a building permit? That’s rocket speed. In Brandenburg it takes 6 months.