Please evaluate the payment plan

I am hearing about this retention for the first time. For my understanding: At some point during the construction phase, I pay 5% of the construction costs (e.g., 25k€ for a house costing 500k€) into a security account. The money is parked there until it is released to the contractor after 5 years. Correct? What does a variant with a guarantee look like?

A notary escrow account costs money, and I don’t know how you agreed with the company on this. Normally, all defects must be remedied, then the 5% flows. If something serious happens within the 5 years, it must be claimed separately.

In our case, the retention was "only" 7,500 €. We had it paid out to get into the land register and save costs. The notary naturally wants to be paid for the administration, and our developer has a reputation to lose. 1.5 years after construction, there are still 2 defects, but these only concern "cosmetics" and are being dealt with.

To my knowledge, there is a small difference between a property developer contract and a contract for work and services, so they cannot be transferred 1:1.

in our case, it was "only" €7,500 withheld. We had it paid out in order to be entered in the land register and to save costs.

As Musketier just mentioned, with the contract for work you are already registered in the land register (for the land on which the construction is taking place)

In my opinion, this statement is not entirely correct. 5% of the current order status is always withheld. That means 5% of 67% of the construction sum. That then results in 63.65% and not 62%

Hmm, we have only received one invoice so far. We deducted 5% from it (based on the total sum). As far as I know, I have to pay this 5% upon acceptance (concurrently). However, I have not fully understood whether this is for acceptance or for the final invoice. We are buying from a property developer.

We have the 5% withholding as a completion "guarantee". Again: From the first invoice, we directly deducted 5% of the total sum (withheld). Upon acceptance, we receive a "warranty guarantee" of 5% of the construction sum. Note, here the negotiation resulted in the 5% being based on the construction sum, an amount named by the developer and which is lower than the contractual subject (practically total price without land without ancillary building costs; only the developer knows the invoice behind it). The warranty guarantee is valid for 5 years. The completion withholding relates to the contract value (5% of that). Again: property developer. Completion guarantee basically included anyway according to building law, warranty guarantee upon request.

Does the payment schedule always end with 100% or should it be 95% so that the 5% completion bond is reflected? Does anyone have a sample payment schedule for me?

Somehow, I also miss information in the contract about when this bond is paid out. It is also a question of who decides when it is released. And apparently, it is not a warranty bond for us. We have a general contractor. Is that already regulated under the Building Code?

Another question - topic payment terms. What payment term is normal? For us, it is supposed to be 10 days. The Building Code mentions 30. Are 10 days enough to check the invoice and have it paid out by the bank? What is usual?

As far as I understand: 1. Completion bond. 5% of the contract sum, retention, due with the last installment. Return of the bond document with the last installment. 2. Warranty bond. Document is handed over at acceptance (or before/with the last installment?) and then returned after five years. A cash payment of 5% as a warranty bond would seem unusual to me.