Security deposit according to §650 of the Building Code

Our house construction company wants to withhold the final payment as a security deposit according to §650 of the Building Code f

Bonds, guarantees, or payment promises....

To what extent can this service be provided? Without taking out a new loan? Can parents/relatives provide the guarantee, etc.? So that the payment is only made upon the signature of the builders or the guarantor and not on the instruction of the construction company, what options are there? Why does the construction company actually want this?

I know, questions upon questions, but we are currently stuck here.

Why does the home construction company actually want this?

From when is the contract?

The "wanting" would in any case not be validly established towards "consumers," i.e. private individuals, according to 650 f para. 6 no. 2 of the Building Code.

(Under the old legal situation, it would be 648a Building Code with the same regulation in para.)

Edit: However, 650 o Building Code allows certain deviations.

The cheapest option would be a builder's guarantee from R+V. Banks easily charge four-figure amounts for that.

Why the last installment?

Good evening

Thank you very much for the numerous information, attached is a quote from the contract:

Upon maturity of the last partial payment, the client must provide a security for the remuneration agreed upon in additional orders and not yet paid in the amount of 10% of the agreed remuneration (§650f para. 1 Building Code). The security can also be provided by a guarantee or another payment commitment from a credit institution or credit insurer authorized to conduct business within the scope of the Civil Code (§650f para. 2 Building Code). Hausbau Firma must reimburse the client for the usual costs of the security up to a maximum rate of 2% per year. This does not apply if security must be maintained due to objections from the client against the remuneration claim of Hausbau Firma and the objections prove to be unfounded (§650f para. 3 Building Code).

They call the last installment or final installment that, unfortunately, we are not very familiar with. That is why we need information on what we can do, etc.

By the way, the contract is from March 2018

So I’ve now done it through the R+V and they have already taken care of it, no new loans and interest etc., great....

I sincerely thank you for the good tip.

What still bothers me a bit, however, is that they can simply demand something like that... Promising or paying something financial to a construction company beforehand is not so positive.