Work contract with general contractor - questions about the offer

Hello,

we have a contract offer from the general contractor (GU) for our house construction and have also consulted a construction advisor. Some things that are still "open" after a conversation with the GU are the following, and I would be interested in practical experiences / assessments on the following points from other users.

1) The construction advisor was of the opinion that I should have a penalty clause included in the contract. The GU says that this is not common for private projects; the Construction Code law protects me anyway in terms of damages should the construction time be exceeded. Nothing regarding damages needs to be included in the contract because the Construction Code automatically applies.

2) The construction advisor also criticized that the contract does not mention a completion guarantee in the amount of 5%. The GU again refers to the Construction Code and says that inclusion in the contract is therefore not necessary.

In this context, there was also a small disagreement regarding the actually fair payment plan. The construction advisor said the last installment payment after acceptance & defect rectification should rather be 3.5% instead of 2% as stated. The GU says that since we still have the completion guarantee, which we only release when all defects are corrected, we effectively already have a 7% retention with the standard regulation. He does not want to agree to 3.5%. I am particularly curious how this is assessed.

3) The contract includes construction supervision as quality assurance. We actually wanted to remove this because we are commissioning our own expert anyway. But this is not possible. Is it common that this cannot be removed? I understand the GU’s position that especially because people sometimes have their own expert, they need this so that our expert does not drive the site manager crazy. But on the other hand, I have to pay for it. The 4-phase supervision is included in the house price at about €4,000. Alternatively, I was suggested that we can jointly agree on an expert, e.g. from DEKRA. My expert cannot do it because he belongs to the Association of Private Homeowners.

4) The construction advisor recommends including parts of the earthworks under the GU contract because he sees warranty interface issues here. Specifically, he says the soil report requires gravel to be backfilled beneath the dimpled membranes. This should definitely be commissioned through the GU. The GU on the other hand says he has deliberately excluded the earthworks because these can be very variably expensive and he cannot include them in the GU contract without high risk surcharges – so the entire earthworks topic will be tendered.

5) Otherwise, the construction advisor said he has often (with other providers) experienced that additional costs for height adjustments were charged afterwards. He mentioned €8,000. Therefore, one must be careful to include the date of the last height adjustment in the contract. The GU could not make any sense of this. Has anyone ever encountered something like this?

It should be enough to refer to the building application in the contract, shouldn’t it? All heights are included there.

All in all, the feedback from our construction advisor was that we have a pretty fair contract in front of us. He has already had tougher cases.

I had already asked similar questions here and meanwhile have my own opinion on your questions 1, 2a, and 2b. It was the same with us and our general contractor had the same arguments as yours and did not agree to any changes.

Even though more customer-friendly clauses are often recommended online, in books, and by lawyers and experts – as a client you currently don’t have much chance to negotiate the contract. We tried it with our first-choice general contractor – this almost led to an argument and in the end we didn’t build together. With the second contractor we were more relaxed.
The Building Code actually offers reasonable regulations for both sides, in my opinion, with compensation for delay and retention upon completion. At the moment it’s hard for me to take the side of the companies, but they also have to bear a risk if they go too far in advance payments.
No one will agree to both retention AND a guarantee. Between the two options, I would choose the retention. Of course, the final payment should still be negotiated as high as possible; you can try for 1 to 2% more.

An important point would be a fixed completion date, not a formulation like "6 months from the start of construction."

Retention AND guarantee will not be accepted by anyone.

I think the guarantee is included in the Building Code?

What would be important is a fixed completion date, not a formulation like "6 months from the start of construction".

We do not have an approved building permit yet, so unfortunately that is not possible. If we wait until the building permit is approved, they will no longer offer the same conditions because (allegedly) the insulation will become more expensive.

What does the building application have to do with a proper clause for scheduling? Then just stipulate that construction must begin within x months after approval and be completed within y months. The contractor will propose weather clauses on their own if they agree to such a construction time clause.

What does the building application have to do with a proper clause for scheduling? Then just stipulate that construction must begin within x months after approval and must be completed within y months. Weather clauses will be suggested by the contractor on their own if they agree to such a construction period clause.

stefanc84 writes "fixed completion date" and not a formulation like "6 months from start of construction." That’s what I referred to.

Our currently submitted clause states: "Construction begins within two months after the building start requirements are met." a) Building permit (abbreviated) b) Insurance certificates from the client (abbreviated) c) Submission of a financing confirmation (abbreviated)

Then it says: "The completion of the construction project takes place within nine months after the start of construction. Frost and bad weather conditions extend the construction time accordingly. The notification of frost and bad weather conditions is made by the contractor’s site management, optionally by letter, fax or email."

And the construction consultant is not happy with that at all. He wanted the bad weather clause removed and a fixed completion date. He said one should, if necessary, assume 11 or 12 months construction time, but the main thing is that there is a fixed date.

I believe, from your perspective maria16, the contract is okay as I interpret your statement? Of course, you can wait until the building application is approved to implement the building consultant’s proposal, but then you lose time for the execution planning, which only starts after signing the contract.

At the same time, the price is only fixed for 12 months after contract conclusion. I definitely don’t sign that. Because the building application takes up to three months (sent out yesterday), then two months of preparation time and nine months of construction time. Then the agreement of a "fixed lump sum price" would be undermined. It is now being clarified with management to fix the price fixation at 15 months.

Our general contractor also includes an expert (DEKRA) in the scope of services. Various service packages can be chosen. We had decided on an independent expert with court approval. The general contractor removed the expert from their services and reduced the costs accordingly.