I found various opinions on this and would like to know how this issue was handled contractually or possibly renegotiated in your cases.
According to our construction contract, we always pay first, and then the next phase of construction is completed. So, our payments are always made in advance.
Based on the assessment of a friend with industry experience, this is not uncommon, but he would try to renegotiate it. An invoice that has already been paid is no longer a "lever" for negotiation.
How was it handled in your experience?
According to our construction contract, we always pay first, and then the next phase of construction is completed. So, our payments are always made in advance.
Based on the assessment of a friend with industry experience, this is not uncommon, but he would try to renegotiate it. An invoice that has already been paid is no longer a "lever" for negotiation.
How was it handled in your experience?
B
Bauexperte29 Jul 2016 23:47Mizit schrieb:
I assume that preparing the documents is also work and can and should be compensated accordingly. Yes, that is correct and is also a delivered service; so you are not paying in advance. What is unusual is that this service is split into two payment installments; nothing more.
You mention payment installments, each in 10% increments. How much did you pay upon completion of the shell (i.e., shell construction, windows, carpentry, and roof)? How many payment installments have been agreed overall?
Sorry, professional habit
Best regards, Bauexperte
We originally included this in the payment schedule: payment after each construction phase. It was phrased carefully with lines like: "Upon installation of the ground floor ceiling," and so on. Anyone who didn’t understand this effectively agreed to pay in advance. This was a tough negotiation point for us, but we didn’t give in. Otherwise, we wouldn’t have signed. And in hindsight, it was absolutely the right decision! Everything went very well, but you never know...
Statistically, the construction industry has the highest rate of insolvencies. When I see how some contractors work, it doesn’t surprise me. Therefore: never pay in advance!! Unless it’s for planning documents... that risk is acceptable, but nothing more.
Statistically, the construction industry has the highest rate of insolvencies. When I see how some contractors work, it doesn’t surprise me. Therefore: never pay in advance!! Unless it’s for planning documents... that risk is acceptable, but nothing more.
tabtab schrieb:
Therefore: never pay in advance!! Unless it’s for planning documents... that risk can be taken, but no more.Even then, it’s not necessary: service provided --> invoice
Bauexperte schrieb:
Yes, that is correct and it is also a service already provided; so you are not paying in advance. What is unusual is that this service is split into two payment installments; nothing more.
You mention payment installments, each at 10%. How much have you paid upon completion of the shell structure (that is, shell, windows, carpentry, and roof)? How many payment installments are agreed in total?
Sorry, occupational habit
Regards, BauexperteI will have to check the papers again later!
But I am already paying 3% after the contract confirmation. This means signing the construction contract. At that time, no building permit/planning permission had been applied for yet, no construction briefing had taken place, and so on. What exactly am I paying 3% for here?
B
Bauexperte31 Jul 2016 00:00Mizit schrieb:
What exactly am I paying 3% for here?Aside from the fact that this question is somewhat late, you need to direct it to your contract partner.Since I am not familiar with your contract or your provider, I cannot comment on their business practices. The 3% "could" represent an administrative fee, but it could also be an advance payment for architectural services ... or something else.
Regards, Bauexperte
Mizit schrieb:
But I already pay 3% after the contract confirmation. Effectively an advance payment toward your structural completion milestone.
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