Plot and house from "one" source, but no construction contract?

Hello everyone,

we (a family of 3 and a half) have been searching more or less intensively for a building plot for about 3 years. Now we have found one that we really like very much in terms of size, location, and surroundings. It is located in a new development area, where, however, all plots are tied to a construction company. So if we want to have the plot, we also have to build with this construction company. I actually assumed that this company acts as the developer. However, after an initial conversation, it turned out that this is apparently not the case. Obviously, we would buy the house from a subsidiary of the construction company and then have it built by the construction company, meaning we act as builders.

Now I’m not so sure what to make of the whole thing. On the one hand, it seems, at least from my layman’s perspective, that the risks, which are always warned about in the land service from the construction company, can be avoided. Because the plot really exists, and when signing the contract we would buy the specific plot with the house planned on it. However, we would then completely put ourselves in the hands of the construction company. What if the building site survey, which will probably only be carried out after the purchase, shows that something has to be done differently? Also, the planning of the house on the plot would then be carried out by architects of the construction company, and I already see a conflict of interest there.

Are there perhaps experiences with this constellation or suggestions/further food for thought, or can someone perhaps point out further pitfalls that I am not currently thinking of? We are aware that in this constellation we have to pay real estate transfer tax on the plot and the house. Unfortunately, also in view of the foreseeable political direction, we now see this almost as our last chance to find a plot or house here in the region within still reasonable proximity to the city that is affordable for our tight budget.

I hope this was not too confusing and I look forward to your answers.

Until then, best regards H.

There you combine the disadvantages of both worlds for yourselves while the construction company combines the advantages. The issue with the real estate transfer tax is only one part, the other problem is that you as the builder are then responsible for everything that occurs on the property. Not only redesign due to soil surveys but also possible contamination (polluted soils, unexploded ordnance) or delays caused by Celtic graves, etc. are all then your problem. If you consequently fall out of the fixed-price commitment... Besides, this arrangement will certainly be used to shift some things to the construction side that actually belong to the developer. I am thinking of things like earthworks, utility connections, insurances. However, as the builder, you also have an advantage over the developer: since the house is being built on your property, you have the house rights and could enter the construction site at any time. That is not necessarily the case with the developer. Since you can only choose one construction company, you have to examine them very carefully. That starts with the construction planning, extends to the wall structure, the usual standard equipment, and so on. At this point, I would recommend planning the house mostly in advance before the contract for the land is signed so that you know if the whole arrangement also suits your taste.

Hello everyone,

we (a family of 3 1/2) have been searching more or less intensively for a building plot for about 3 years. Now we have found one that we really like in terms of size, location, and surroundings. It is located in a new development area, in which, however, all plots are tied to a construction company. So if we want to have the plot, we also have to build with this construction company. I actually assumed that this company acts as the developer. However, after an initial conversation, it turned out that this is probably not the case. Apparently, we would buy the house from a subsidiary of the construction company and then have it built by the construction company, meaning we would act as the builders.

Now I am not so sure what to make of the whole thing. On the one hand, from my layman’s perspective at least, it seems that the risks, which the construction company always warns about in its plot service, can be avoided. Because the plot really exists and when signing the contract we would buy the specific plot with the planned house on it.
However, we would then be completely at the mercy of the construction company. What if the soil report for the building plot, which will probably only be done after the purchase, shows that something has to be done differently? Also, the house planning for the plot would then be carried out by architects of the construction company, and I already see a conflict of interest there.

Does anyone perhaps have experience with this constellation or suggestions/further food for thought or can maybe point out other pitfalls that I am currently not thinking of?
That we have to pay property transfer tax on both the plot and the house in this constellation is clear to us. Unfortunately, given the foreseeable political direction, we now almost see this as our last chance to find an affordable plot or house in still reasonable proximity to the city for our tight budget here in the region.

I hope this was not too confusing and I look forward to your answers.

Until then, best regards
H.

I have bought a plot and signed a construction contract with a similar structure. Your building area sounds very similar to mine ;) The obvious disadvantage is that we have to pay taxes on both land and house costs. I was told that the entire construction and land development would go smoothly. There is an assumption that a company that develops such an area with many plots and houses does decent work. Simply messing up one house, but several houses in the same development area? In a few weeks we will start building. After that, I will post my experience.

We are currently building with such a construction as well. The plot was only available if we built on it with construction company XY. The seller of the plot was also a subsidiary. However, we insisted that the plot and the construction contract be notarized together. We were also provided with the soil report, contaminated sites register, etc. BEFORE the purchase. You can also have the construction description given to you before buying the plot. We knew in advance what was included on the builder’s side.
Will you get the house turnkey?

Regarding this construct and the reasons why construction companies resort to it, I have just written in this thread: