Withholding payment for defects in the shell construction

Hello everyone,

I wanted to check in again with an update.

We had our appointment with the lawyer. Unfortunately, the outcome of the meeting was not particularly encouraging:

- Regarding the insolvency of the main contractor (GU), action can only be taken once the GU has actually filed for insolvency.

- Concerning the defects, he encouraged us to withhold the money. In principle, there might also be a right to terminate, but he advised us against this as long as we don’t have anyone to fix the defects and continue the construction at an affordable price for us.

We then initially sought another conversation with the GU. This also initially sounded positive. We were promised that a new shell construction company would be ready to continue the construction work as of 01.03. We were also promised that we would be assigned a site manager who would oversee the construction and the correction of defects.

On 01.03, an inspection took place with the site manager and the expert (defects range between 40k according to the site manager and 50k according to the expert) for all three houses in total.

Due to the amount of the defect correction costs, our GU decided to have the shell constructor, who caused the issues, take over the defect correction after all. However, our new site manager refuses to take over the site management here.

Additionally, we are currently having some problems with the electrician, who has not been paid for his construction power box since November (700€) and now wants the money from us (including a threat that he will come by with his attack dogs and then we can see again whether we will pay his invoice).

After a phone call with our GU, he informed us that he would like to pay but currently does not have the money!

Our conclusion from this call is that we urgently need to look for alternatives to complete the building. Even if no insolvency has been filed yet, I think it can’t be long now if there isn’t even 700€ left....

Doesn't sound good. If he can't pay 700 €, he is broke and therefore insolvent. As soon as he hires a craftsman now, whom he then also simply cannot pay, he is committing a criminal offense. It's all rubbish and the fact that the obligation to report insolvency has been suspended by law because of Corona doesn't make it any better either.

I wanted to check in again with an update.

Thanks for the feedback.

That doesn't sound good. 50k for defect rectification?

You should withhold that from the invoice.

There might be potential savings in the execution.

This is what we withheld from the invoice. Unfortunately, it doesn’t change the fact that it was overpaid, but at least that part is still there.

That doesn't sound good. 50k for defect remediation?

There are a total of 3 terraced houses. That means for each house we have 15-17k in defects. Maybe a bit can be negotiated, but overall the amount will probably be needed.
- The ceiling needs to be broken open in the area of the insulation.
- For each house a partition wall must be dismantled to correctly establish sound insulation.
- Reinforcing steel protrudes from the buildings in several places and must be sealed.
- Ground floor building sealing was forgotten.
- Some walls must be dismantled because the minimum offset was not maintained.
- and a few more minor defects

oh dear, I am really sorry for you

Yes, somehow you always hope it won’t happen to you :(

We have now received the first offer from an architect. But I have started a new about it