Payment plan - 5% retention not regulated

Insolvency, by the way, often does not happen due to malicious intent

However, the statement does not protect against the dangers of an unreasonable payment plan that one has signed.

I spoke today to our architect/contact person/junior manager about the fact that we have a legal right to a retention/guarantee of 5% and that otherwise the payment plan would not be legally effective. She replied that we have signed the payment plan on both sides as it is and therefore it is valid. A guarantee would only involve additional costs and they also need the money to order materials, etc.

This is not wishful thinking. The 5% are law and non-negotiable. Quite simple. A guarantee is not necessary. The law speaks of a security deposit, so you can also retain 5% of the total gross amount.

Is there also a regulation that the final payment must be 10%?

Yes. It is also stated in the law. Interim payment maximum 90% of the total amount. The remaining 10% AFTER acceptance. Quite honestly? Such a payment plan would be a deal breaker for me and probably also a deal breaker for us as a bank (you will surely be financing properly) and we would only want to support your financing with these disbursements with at most 50% equity or similar.

PS: According to the Bundesanzeiger, the company had liabilities/assets of just under €6,000,000 for 2021.

1. very old 2. means nothing. Benko's balance sheet was in the billion range and now the insolvency is here.

we signed a contract for work with a regional construction company last May for the construction of a single-family home, which builds about 30-40 houses per year. Next month we will buy the land from the municipality and then, as soon as we receive the loan approval for the housing subsidy from the state of B-W and thus remove the suspensive condition in the contract for work, we will begin construction.

I won't even bother with the 5% from the headline; I find this sequence from the introduction much more remarkable, I summarize: first) the construction contract was signed thereafter) and even currently still in the future the land will be bought and last) the subsidy approval is hoped for. When was the application for the subsidy funds submitted? Maybe you are lucky to have signed the contract for work prematurely in a way that harms the subsidy and thus still escape the trap (?)

You pay huge sums in advance (80%) for a shell construction, [...]. You can't sign something like that, and I keep wondering that the banks play along with such...

I can only join in the shaking of my head. With what "argument" did the devil seduce you into this premature contract signing: A. the panic of a "only valid this week" price promise; B. that the suspensive condition built in the security of a pending invalidity; C. don't be stupid and quickly grab the subsidy?

Hello,
I am happy to respond briefly to your post:
In March '23 we received the approval in the tender process for the municipal building plot. We were aware that we could not manage the construction project with the currently usual market interest rates. However, we are/were eligible for housing promotion in Baden-Württemberg (Z20) loan... €350,500 at 0% for 20 years. However, a concrete application with a specific construction project (sections, floor plan, room calculations, etc.) must be submitted. When it became clear that the interest rates had to be raised from 0% to 1% as of a cut-off date, we had to act quickly because the difference was quite significant. There were actually only a few days, and due to some personal experiences, we decided on the general contractor (GU). We concluded the work contract with a suspensive condition and reference to the housing promotion program, so the contract was not concluded in a way that jeopardizes funding.
We have now received the notice that we are eligible for funding but have not yet received the loan agreement because state and federal funds have not yet been made available.
We have the notary appointment for the plot at the end of March.
Do you think the bank or also the house bank, which is providing the supplementary financing, can now still say that they will only support our project if the payment schedule is adjusted to comply with the Building Code? Then we could work towards that.

The application was submitted one day after the contract was concluded, as we needed the plans etc. for the application.

Do you think that the bank or also the house bank, which is providing the supplementary financing, can now still say that they will only support our project if the payment plan is adjusted to comply with the Building Code? Then we could work towards that.

I do not know the conditions under which the funding is disbursed.
But as a bank, we only provide funds based on construction progress – and we could not do that as the sole financier if there is no construction progress, but a lot of money is supposed to flow already. However, you are now using equity and the funding first. That should fit then. But only if the funding can be disbursed without compensation from the general contractor.