Building material defects & co.: Have the building contract reviewed before construction begins
The plot has been purchased, the home is planned and the anticipation of the start of construction is growing. However, before things can get started, the building contract must be signed. A comprehensive contract review is mandatory before signing. After all, vague wording, gaps in the content or bottlenecks in the procurement of materials can quickly lead to unwanted additional costs. This article explains what you need to look out for when drafting a building contract, where you can have a contract reviewed and what a review costs.
What is a building contract?
The legal definition of a building contract can be found in Section 650a of the German Civil Code (BGB). It states:
“A building contract is a contract for the construction, restoration, removal or conversion of a building, an outdoor facility or a part thereof.”
The special feature: As the client, you have the choice of which contractual basis you want for your construction project – and which generally applicable framework conditions the contract should be based on.
The basis of a VOB contract is the German Construction Contract Procedures (Vergabe- und Vertragsordnung für Bauleistungen). A VOB contract is usually used if the construction project is complex and time-consuming. The BGB contract, on the other hand, is based on the German Civil Code. It is a special form of contract for work and services. The subject of the contract can be the construction of a new house, a repair or the conversion of a building.
What is included in a building contract?
A building contract serves to regulate the construction processes, sets deadlines for completion and defines which building materials are to be used. Accordingly, the contract must contain information on the contracting parties, the construction work, the construction period and information on acceptance and remuneration.
In addition, the so-called construction description is one of the components. It defines which services a company must provide to the client and contains
- General key data of the building to be constructed
- Floor plans, views and sections
- Information on the energy and sound insulation standard
- A description of the electrical, sanitary and outdoor facilities
- Information on planning services, the expected work on the property and acceptance
- Information on the materials and raw materials used
The more detailed the building description is, the better the craftsmen can work according to your wishes. If the work deviates from the contract or there are defects, a precise building specification gives you good arguments to take legal action against them.
As the client, you should negotiate the price for the agreed services before signing the contract. A reliable all-inclusive price gives you planning security. Important: Pay attention to unrecorded costs! These often arise due to assumed subsoil conditions, necessary insurance or the supply of electricity and water to the construction site.
Does it make sense to review the contract?
Even if the above information is included in the building contract, it may contain gaps or cost traps. Check the finished document carefully before signing it.
If your construction project is not completed on time, for example, you may be entitled to a contractual penalty. However, only if an effective clause has been agreed in the building contract.
The wording is also important. Seemingly harmless text passages, such as “technical changes” or “comparable”, can result in the construction work not being of the quality you desired upon acceptance.
As a building contractor, a contract review is very important. For example, if you are unable to complete a contract due to a current shortage of building materials, you may be liable to a contractual penalty. As part of a contract review, content is optimized so that you are protected from any additional payments.
Due to a shortage of building materials and increased raw material prices: Can building contracts be amended?
The current shortage of building materials is causing major problems for trade businesses and building owners. In current contracts, the material quantities and costs are usually fixed for the long term. What happens if these contract terms cannot be met due to a shortage of building materials?
Construction companies are dependent on the goodwill of the client. Changes to the contract are only possible with the client’s consent. This is set out – together with the changes – in a supplementary agreement. One conceivable option would be an agreement on costing with daily prices on proof. Alternatively, the client buys and pays for the materials himself. If completion is delayed due to a shortage of building materials, the craftsman and builder can redefine the completion date in a supplementary agreement.
As the client, on the other hand, you have the right to order changes to the contract without the consent of the construction company. However, this also requires
- the termination of partial services
- the agreement of additional services
- a reduction in the quantity of certain building materials
- an extension of the construction period
- a corresponding supplementary agreement.
Construction law initially provides for a joint attempt by the client and construction company to reach agreement on the desired changes and their costs within 30 days (§ 650b BGB). A willingness to compromise is required here. Ideally, you should submit your change requests and then receive a corresponding supplementary offer.
If no agreement can be reached, the builder may order the change in text form (Section 650c (2) BGB). However, he must be able to prove that the construction company has received the previous change request. Important: If the client issues an order, the construction company can demand advance payments of up to 80 percent for services already rendered.
Where can you have a building contract reviewed?
It is difficult for laypersons to fully review a building contract. A legal advisor can provide valuable assistance. They will check whether the contract is complete and complies with the statutory provisions. In addition, a lawyer will record your individual wishes in the contract in a legally secure manner. You can find out whether your building contract complies with the law in our contract review.
However, a building contract does not necessarily have to be checked by a lawyer. Nationwide associations (e.g. the Bauherren-Schutzbund), the consumer advice centers of the federal states and the TÜV also offer a corresponding check.
What does a contract review by a lawyer cost?
In relation to the construction costs, the costs for a building contract review are low. For example, if you want to build a house and have the contract reviewed by a lawyer, you should expect costs of around 1,000 to 2,000 euros.
The exact amount of the costs depends on the amount of the business fee. This is determined on the basis of the value of the matter in question. Depending on the scope and difficulty of the examination, the fee is multiplied by a factor of 0.5 to 2.5. A flat-rate postal charge of 20 euros and the statutory value added tax are added.
The costs for an audit by a consumer advice center vary depending on the federal state. A contract review in Mecklenburg-Western Pomerania, for example, costs around 70 euros, while in Baden-Württemberg it costs just under 360 euros.
Checking a building contract: The most important points in brief
As the builder, make sure that your wishes are sufficiently taken into account when drawing up the contract. Are they formulated precisely enough? Does the building contract contain a detailed building description? In addition to the developer’s tasks, the latter must also include the prices for the construction work as well as information on the materials used and acceptance.
Carefully review the building contract before signing it. A legal advisor will optimize the general contents of the contract according to your wishes and check the building contract for incorrect clauses. In addition, a lawyer will point out hidden cost traps as part of the review.
Construction law gives you the right to amend a building contract retrospectively. Discuss any desired changes to the contract with your contractual partner. Ideally, you will reach an agreement and agree on a corresponding supplementary offer. Otherwise, you can order the changes in writing after 30 days.
