HAUSBAU-RATGEBER
2010-10-25 18:36:32
- #1
What to Consider Before Signing a Contract
Our recommendation to conduct a review of the companies in question is a golden rule that any future builder should absolutely adhere to before signing a contract. Proceed as follows:
These are some of the fundamental things a future builder should consider. OHG or not, it does not matter. And with offers that are too good to be true, you should be doubly cautious.
Our recommendation to conduct a review of the companies in question is a golden rule that any future builder should absolutely adhere to before signing a contract. Proceed as follows:
[*]1. Have the company checked before signing the contract.
[*]2. If the review is okay, then search the Internet for any alleged negative information to get a more comprehensive picture.
[*]3. Keep in mind that so-called references actually are not, since no one would spread negative things. References are therefore only worthless paper and rarely useful.
[*]4. Have the contracts reviewed before signing by a lawyer for legal objections and by a construction expert who is an ace in construction contract law to examine the contractual content for pros and cons from the builder’s perspective. The Bauherrennotruf can assist you with this at the email address bauherrennotruf@gmx.de or by phone at 040 / 88 88 66 22.
[*]5. Check before signing the contract whether construction contracts that include a so-called financing confirmation clause as specified by the contractor are not, in reality, a hidden assignment declaration. Normally, a copy of the letter from the bank, the two-liner to the builders confirming the financing is secured, suffices for the contractor. If the company insists on its own specification, only agree to it if an unconditional performance bond covering the entire construction sum is provided in return. Remember, only simultaneous exchange and through a notary.
[*]6. The payment plan should be correct! After completion of the shell, plaster or facing, roofing, windows, terrace and front door, including planning costs, the amount paid to date should not exceed 60% of the construction contract sum.
Important: Payments of any kind before you have proof that the building application has been submitted (official confirmation of receipt by the authority) should be contractually excluded. Also, this first installment should not exceed 3%. The second installment should be titled "completion of footing/foundation slab." Also, the installment amount should not exceed 7% for the foundation slab and 10% for the basement slab.
Please remember that banks do not check this nor are liable for it.
[*]7. Do not be dazzled by things meant to persuade you to sign. They may look nice but usually serve only as a smokescreen.
Pay attention to the following in this regard:
- DEKRA / TÜV approved (often questionable, but frequently required by banks for funding)
- Warranty insurance
- Written assurance of completion of construction work by the company (nonsense, the company already commits through the contract)
- Site manager provided (but this is also paid by the company, remember, everyone favors their own interests)
- Expert inspectors for construction acceptance
[*]8. Also, gifts and concessions from companies should only be attempts to persuade you to sign. Always remember, a good contractor makes fair offers and will never give anything away for free. Usually, they will only negotiate a percentage discount.
[*]9. Make sure you have only one responsible contracting partner. If it is offered that they only coordinate and you should conclude contracts directly with the executing companies or a general contractor (GU), it will be difficult to hold the licensor liable who offers you such an arrangement.
Usually, you end up stuck with the trouble with the GU and get the short end of the stick.
Typically, these downstream companies are licensees who must pay the licensor a not insignificant portion of the contract value agreed with you. You save money if you find the companies yourself, request offers, and then separately commission an architect for the construction planning and an engineer for the construction supervision. The latter two are also liable for their performed duties. A licensor does not do this.
These are some of the fundamental things a future builder should consider. OHG or not, it does not matter. And with offers that are too good to be true, you should be doubly cautious.