Unpredictability of construction costs - Will the project fail because of it?

Question: If the contract is void due to the lack of a cancellation policy, would one be entitled to compensation? Or would the provider even be off the hook?

Void means that one acts as if the contract does not exist. And therefore nothing should happen at all. That would be even better if one party were then entitled to compensation. One could also ask the exact opposite ;)

typisch deutsch eben ländersache. wusste ich nicht. Danke für die Belehrung.

It doesn't really matter with the OP. He is quite insecure, admitted to having very little knowledge, tends to be talked into things and have contracts foisted on him. There should definitely be someone who has knowledge of construction and its peculiarities acting as the site manager.

Question: If the contract is void due to a missing cancellation policy, would one be entitled to compensation? Or would the provider even be off the hook?

No one forces the builder to use a missing or defective cancellation policy as a reason to exercise the right of withdrawal – he could also let the contract continue and insist on its fulfillment. That would only be unwise in the specific case, because according to the assumed offer, there would be a claim to have a house with a non-legally habitable granny flat built at the agreed price (which is why the subsidy would also be denied). Exercising the right of withdrawal within the deadline is qualitatively equivalent to an amicable termination; who should derive a claim for compensation from that? And yes: the contractor can still breathe a sigh of relief if he no longer has to fulfill the contract at the price that has become distasteful to him (he had already hinted that he wanted to drag out the fulfillment until the end of time). I still do not expect him to show gratitude.

Because I have read Bavaria a few times. If the whole thing is in Bavaria, then the granny flat has another problem. The window is too small. It is drawn with about 10% of the room area, but the BayBO requires at least 12.5% for living rooms (raw construction size).

As already mentioned, the granny flat will need its own parking space since it is a separate living unit. I looked at the site plan and wouldn't know off the top of my head where you could just put one. What exactly does your building authority say about the parking spaces?

I just want to say that your budget is a fortune! If your main contractor no longer wants to build, you would also be entitled to compensation. I know many main contractors who have compensated customers with 20-40k for terminating a contract.

Then you simply find a new shell builder, carpenter, roofer. Someone for the facade, etc. Why shouldn't something like that work?!

I don't want any compensation at all, I would already be happy if the contract is simply considered void and we can get out of it without major costs.

The order books here are fuller than before and even with other companies we would have the problem that prices are hardly calculable at the moment. And we don't dare to do a single contract award.

It doesn't really matter with the OP. He is already quite insecure, admitted to knowing very little, tends to be talked into things and have contracts foisted upon him. Someone who has knowledge of construction and its peculiarities should definitely be the site manager.

Thanks for the nice assessment! By the way, there are people behind this.
We know we have no clue, so we specifically went to the Bauherren-Schutzbund, who should have checked the contract and accompanied the construction. That was probably wrong again.