Realistic penalty amount per working day for construction delay

To be honest, I find sums like 900 € per working day quite exaggerated. However, in my opinion, 35 € is far too little. In our case, two families would move into a jointly built house. If we couldn't move in on time, we would theoretically have to continue paying rent for two places. Practically, however, one may have already terminated both apartments three months in advance and then, if things go really badly, end up homeless...

And then? Are you supposed to try to finance two hotel rooms with the 35 €? Plus rent something else to store all your belongings + possibly pay for two extra moves (old apartments <-> hotel)? I would rather find amounts of about 100 € per day appropriate.

Hello,

To be honest, I find sums like 900 € per working day quite exaggerated.

I don't really get that from your previous answers...

However, in my opinion, 35 € is far too little. In our case, two families would move into a jointly built house. If we couldn't move in on time, we would theoretically have to continue paying two rents. In practice, however, one might have already terminated both apartments three months in advance and then, if things go really badly, end up on the street...

I wonder what criteria you use to choose your building partner if you are already assuming a worst-case scenario upfront?

And then? Should one try to finance two hotel rooms with the 35 €? Also rent something to store all the belongings + possibly pay for two extra moves (old apartments <-> hotel)? I would rather find amounts of about 100 € per day reasonable.

2 families means 2 contracts or one and then a single-family house with a granny flat? A two-family house?

Why don’t you take the, in my opinion, logical approach and discuss your concerns with the contract partner you trust?

Rhenish greetings

: I wonder why my questions bother you so much or do you feel attacked in some way by them?

Of course, I will still discuss it with my trusted contracting partner, but it is surely legitimate to prepare properly for this conversation beforehand and to inform oneself – especially when one has no clue about a matter. Therefore, I first wanted to gather information with the help of the internet and especially this forum in order to be able to even assess the sum mentioned in the contract.

I am by no means assuming a worst-case scenario. However, people usually only build once in their lifetime and I certainly don’t need to explain to you that for most builders a possible worst-case scenario would mean financial ruin. Therefore, it should be allowed to deal with all eventualities beforehand, instead of signing everything blindly in good faith (or should I rather say naively).

Hello,

: I wonder why my questions bother you so much or do you feel somehow attacked by them?

Why should I feel attacked? What bothers me is the underlying tone of your previous post; I have been doing my job long enough to recognize that you are anticipating trouble in advance. That is why I respond in order to sensitize other users to similar situations. Because a reputable provider wants nothing more than his client: to complete the contract to mutual satisfaction.

Of course, I will still discuss it with the contract partner I trust, but it is surely legitimate to prepare properly for this conversation beforehand and to inform oneself – especially when one has no idea about a matter. Therefore, I first wanted to get informed with the help of the internet and especially this forum to be able to assess the amount mentioned in the contract at all.

Absolutely fine – if it weren’t for the fact that it says: "according to the recommended percentages, the amount should be somewhere between 500 and 900 € for us! [...] or are they trying to pull a fast one on us?" Or also: "It says that the Federal Court of Justice even recommends 0.3% of the construction sum per working day of delay! That would be over 900 € for us!!!" With three exclamation marks...

I am by no means assuming a worst-case scenario. However, people usually only build once in their lives, and I certainly don’t have to explain to you that for most builders a potential worst-case scenario would mean financial ruin. Therefore, it should be allowed to deal with all eventualities beforehand instead of naively (or should I rather say blindly) signing everything.

That is a point I always bring up, both in reality and here on the forum. In that respect, agreed. Only in your lines lies – perhaps unconsciously, maybe so (if so, I gladly apologize) – the fixed idea that you are right because you researched on the internet. As has just been proven, you are not right; to your credit, however, it should be mentioned that the Bauherren-Schutzbund (Homeowners’ Protection Association) is also not uninvolved.

You write that you are a layman in the field of house construction. On the other hand, you give me the impression that – based on internet knowledge – you want to approach your future contract partner already in advance – and just in case – with a means of pressure. THAT certainly is not the foundation of a temporary partnership. It could very well be that your future contract partner will accommodate you?

Rhenish regards

: I wonder why my questions bother you so much or do you feel attacked by them in some way?

Of course, I will still discuss this with the contractual partner I trust, but it is legitimate to prepare properly for this conversation and to inform oneself beforehand—especially when one has no idea about a matter. Therefore, I first wanted to educate myself with the help of the internet and especially this forum in order to even be able to assess the amount mentioned in the contract.

I am by no means assuming a worst-case scenario. However, people usually only build once in their lives, and I certainly don't have to explain to you that for most builders a possible worst-case scenario would be financial ruin. Therefore, it should be allowed to deal with all eventualities in advance instead of blindly signing everything in good faith (or should I rather say naïvely).

Hello,

You are partly discussing here with developers in the forum who come from practical experience.

Even €100 per day, that is €3,000 per month, is too much. Do you think a developer wants the builder's finances to shrink healthily?

At €50, possible interim financing, storage of furniture, and motel should be feasible.

Moreover, as a rule, there is a three-month notice period which is completely sufficient given the construction progress to move in. However, I am not talking about the outdoor facilities here, purely moving in and sleeping in the new property.

Quotation Bauherren-Schutzbund
"Clients should insist at the time of contract signing that in case of exceeding the completion date a moderate but respectable contractual penalty is agreed upon. For pre-formulated construction contracts, the Federal Court of Justice considers a contractual penalty of 0.3% of the construction sum per working day of deadline overrun, max. 5% of the construction sum, to be appropriate. There is nothing to prevent applying this rate also in contracts between private clients and general contractors."

The Federal Court of Justice rulings concern the effectiveness of contractual penalty clauses.
Maximum values of contractual penalties were assessed by the court.
However, these involved relatively large amounts (a 2012 ruling about a dike gate 3 million, a 2003 ruling about an amount of 28 million DM, etc.)
For a company, an unfinished building can cause a completely different kind of damage per day than for a private homeowner.
Therefore, one should ask what is customary and not what is maximally possible.
And for this reason, I find the application of the rulings to private homeowners by the Bauherren-Schutzbund simply wrong.
The damage to the private homeowner basically initially consists of the double burden of rent and mortgage instalments.
Here there is certainly some room for negotiation with the contracting party.
However, in my opinion, one cannot consider the concept of an all-inclusive hotel package as damage.

One should also bear in mind that it only concerns culpable delay.
Terminating the apartment too early can also backfire in bad weather since then no contractual penalty is due.