unconditional payment obligation

Hello and good evening,

after Aunt Google could not help me at all and the forum search did not get me any further, I would like to ask the professionals here.

I have a construction contract here in which a "unconditional payment obligation of a German credit institution" is required - what exactly is meant by this and what should one make of it?

Additional question: the esteemed financing broker advises a swift conclusion, as the financing conditions will worsen on 11.03. - he justifies this by saying that from then on the financing platforms will be changed (???) and that the rules for construction financing will change anyway from 21.03...

The whole thing makes me a little suspicious (alternative question: am I paranoid?).

Thank you very much in advance for your effort :-)

Hello,

an unconditional payment obligation can be understood as a kind of blank check. Not in the sense of a check, but as a payment commitment or guarantee without restrictive conditions.

Who is supposed to provide this? You or the construction contractor? And why?

From March 21st, almost everything will actually change, as a European directive will then be incorporated into German law. Whether this now constitutes a legal disadvantage I dare to doubt. In the long run, a later conclusion could be advantageous from the customer's perspective. Whether the resulting expenses will simultaneously lead to an increase in conditions I am unable to assess.

Who, when, where and how the systems will be switched will probably vary from bank to bank and from broker to broker. Maybe there really is a statement from one bank to increase conditions. And what about the other 500 banks?

In any case, time pressure and stress are poor advisors. The world after March 21st will indeed be different, but probably no one will be harmed by it.

That is exactly what I would tell him and I would like to see his face.

Thank you for the response,

that this would be something like a "blank check" I had already feared - of course, the house provider wants one from me...
And I also fear that this might not be issued free of charge by the financial institution (to my knowledge, bank guarantees cost money).

Why? It is stated in the contract as a mandatory requirement for the provider to even make a move.

And if the question arises as to why I’m even putting up with this and didn’t just politely decline immediately - they have one of the few affordable plots here (after a year of searching, you slowly get worn out).

I am afraid this is not about any kind of guarantees. It is already established that your bank will give you the money. The provider apparently wants to contractually ensure that in every case payment is made, that is, without making it, for example, dependent on whether the billing construction phase has actually been reached, and/or whether any defects still need to be remedied. This seemingly also leads to the subsequent acceptance being carried out by "implied conduct," meaning: through your (unreserved) payment, the construction is (implicitly) considered accepted (That's what Aunt Google told me about this topic).

And you should also take a look at the EU directive mentioned by toximolotov. I think your agent would like to circumvent it because it imposes extensive obligations of disclosure and documentation on him. In my opinion, he apparently sees these as "disadvantageous" (I don’t want to say "dangerous") for himself, and that is why he is putting pressure on you. If prices were to increase due to this additional bureaucracy, that should have already happened by now; in that respect, I wouldn’t worry.

Aren't we talking about a financing confirmation here? Most home construction companies expect that nowadays. For us, it must be available at the latest by the time of the sample appointment.

But an unconditional financing AND payment confirmation is quite a big deal.

I recommend legal advice from a construction law specialist.

You can bind yourselves more than you realize.

It could also be an assignment of the payment obligation, by the way. Banks often don't even charge for that.

Unfortunately, I am no longer so closely involved with this issue that I know the exact background and thus the catch.