Proof of equity to prefab house company: questions experiences?

, and what is better about the account lock? The money is not exactly "gone," but I still can’t access it if the contractor does not agree. If defects are found and I therefore don’t want to pay or want to reduce the installment, you end up at a dead end. The contractor does not get the money without my consent, and I don’t get it without his. So everything is at a standstill, and who holds the longer lever now? Another scenario: insolvency of the contractor. In the worst case, I not only have a half-finished construction shell but also can’t even look for a new contractor because I can’t access my(!) money until all legal disputes with the administrator are resolved.
In my construction project, I actually rescinded a construction contract for such reasons and did not sign a second one because the contractor was not willing to remove this clause (the latter even wanted an assignment of the entire contract sum PLUS a bank guarantee for the final installment).

The fact that you do not have access to the money blocked for the general contractor would only be a problem if you refuse to pay and want to spend the money on other things. In the case of insolvency, it would of course be unfortunate. On the other hand, you also have to consider the general contractor, because the same risk applies to them. Imagine the client suddenly has to cover major expenses (car broken down, mother needs to go to a nursing home, unemployment) and then says, like Maike Schlecker: "There is nothing (i.e., no money) left." I find it strange that the general contractor is always seen here as a somewhat greedy, bad enemy. There are also people working there who want to have their money at the end of the month. Then you have to give up, they will hardly remove this clause.

The problem is not the "evil" general contractor. The problem is that there is a severe imbalance of power in construction. The only small leverage the client has at all is money. Once they lose control of it, they are completely powerless.

The fact that you don’t get access to the money that is blocked for the general contractor would only be a problem if you do not want to pay and want to use the money for other things.

I already have this problem if I want to withhold or at least reduce a payment due to defects proven by expert opinions. How should it proceed then?

Imagine the client suddenly has to cover bigger expenses (car broken, mother needs to go to a care home, unemployment) and then says, like Maike Schlecker:
“There’s nothing (that is money) left.”

Um, yes, like with every contract, you order a car, a couch, a kitchen... For such things there are retention of title clauses and the like. In addition, in absolutely every payment schedule the client has already overpaid the services at the start anyway. If you calculate everything that the general contractor has really (!) lost in case the client goes bankrupt, i.e. finished built-in, non-removable material and already paid wages, then there is a lot of leeway for their risk.

Then you have to leave it, they will hardly remove this clause.

There is freedom of contract for that. As I said, I revoked an existing contract shortly before the preparation of the building application documents because of this and did not sign a second one. The third general contractor on their own only wanted a surety for the final installment as an insurance policy, in return there was a fulfillment guarantee for me from them. That is fair and sufficiently secure for both sides.

You do not hand over the money; the transfer is made only on your instruction. However, you are only allowed to pay amount X to the [GU]. This is how it works with every loan as well; the [GU] secures his amount with the bank. The [GU] cannot just go to your bank and say, "Here is the invoice, I am done, please pay!"

You don't hand over the money

Yes, you do exactly that. The money may still be counted in your account, but it will leave it only in the direction of the general contractor (GU), no matter what happens to the GU, the house, or you. In my understanding, it's gone because you no longer have any access to it. Whether you sign the payment instruction or not ultimately only affects WHEN the GU gets the money, not IF.

The GU can't just go to your bank and say "Here is the invoice, I'm done, please pay!"

but how then?
The house is finished, you find defects and do not sign the release. The GU says, I don't care, I won't do anything anymore, maybe if payment has been made. How does this game continue now?

Whether you sign the payment instruction or not ultimately only affects WHEN the general contractor gets the money, not IF.

I would have a lawyer explain to me how something like this plays out in the worst-case scenario and also under which of the mentioned variants. So if you are really in the situation where you have set deadlines, they have passed, and now you hire someone else. Or there is still money left, but work is still outstanding, and the general contractor goes bankrupt. So what passes into the insolvency estate and what remains yours. So, maybe I am naive, but my understanding (as a layperson) regarding held securities is precisely not that they belong arbitrarily to the other party, regardless of whether they perform their service or not. But in case of doubt, I would ask a professional what happens in certain cases.