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.