Retention 5% Security Payment GU Construction Contract

Currently, everything should only be reserved

With the general contractor, you are usually already the owner before construction begins. Do not confuse this with the developer contract.

Both points must be included in the construction contract, construction companies or general contractors "often forget" this. In our construction contract, there was a 5% security retention and a 3% warranty retention. The following procedure was followed during the construction phase: 5% was withheld from each invoice by us; after the completion inspection at the end, carried out by us and our construction supervisor from the Homeowners Protection Association, a final statement with the last installment and the cumulative 5% deductions was presented. From this, we withheld and paid the 3% warranty retention. For the 3%, we were offered insurance which we accepted (if the construction company goes bankrupt, you are out of luck, but insurance remains). After receiving the insurance policy and in consultation with the Homeowners Protection Association, we paid the last 3%, which was then 6 weeks after moving in. Regards, Nida

Oh, is that really the case? Do they withhold 5% from every invoice amount? I thought that was taken into account in the installment payment plan so that at least 5% would only be due upon final acceptance. In my installment payment plan, even 10% is only due upon final acceptance. For this reason, I assumed that I now have to pay all previous partial invoices in full.

our construction took place in 2018/19 when the rates were 5% and 3% currently,
with the 2020 announcement, it will be 10% and 3%.
The lawyer from the Homeowners Protection Association recommended this clause and many others to us,
we then negotiated them into the construction contract before signing.
The construction company had none of this in the contracts, and the boss changed it with a broad grin, and we signed it back then.
He was very surprised by the insolvency clause, he didn’t know about it at all.
As construction laymen, that was our only chance to get help; the accompanying engineer was also the damage assessor and looked very closely and discussed the construction executions.
Best regards, Nida

Yes, I'm not concerned about the percentage now, but about the procedure of taking this retention from each installment. In my case, that would mean that before the last installment (final acceptance), I would have even transferred 20% less than the total amount. I am unsure if that is what is meant. On the other hand, your general contractor apparently accepted it that way...

Adding all discounts and withholdings is not intended,
pay 100% of the construction sum in individual invoices minus withholding according to the contract.
After final acceptance, the remaining installment plus all withholdings equals 100% of the construction sum.
Withhold 3% of this (construction contract) as a guarantee withholding,
either the construction company agrees to this or offers insurance for the 3%.
A call to the construction company’s accounting department should settle everything.
Best regards, Nida