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?
Mizit schrieb:
But I already pay 3% after the contract is confirmed. This means the signature of the construction contract. At that point, no building permit / planning permission application has been submitted, and no construction consultation has taken place yet, etc. So what exactly am I paying 3% for here?Preliminary planning, creating and possibly adjusting the floor plan, preparing the offer, client meetings, preliminary review of zoning plans, positioning the house on the site plan, and so on... You should be able to assess this better than we can from a distance.
It is more common to make payments only upon submitting the building permit / planning permission applications or notifications.
And this is exactly the point we need to discuss again. Since no application has been submitted at the time of signing the contract, and accordingly nothing has happened on the construction site, it can only be about a fee for the planning phase or it is considered that we as clients are making an advance payment for the upcoming construction stages. It is not awkwardly worded either, since everything is introduced with the word "after."
Basically, I am someone who believes that nobody should have to work for free.
However, I find the possible argument that this initial 3% should be understood as a fee for planning to be not entirely satisfactory. Until the contract is signed, it is still a project negotiation, and the total price of the house will include the fact that many people gather information and floor plans and then decide against this contractor. That is just how it is. If you buy a car, you will probably also visit several companies, gather information, and have conversations, but not buy a car everywhere. So, I do not think it is good practice to say that you actually have to pay for advice beforehand.
And for a risk as big as building a house, I generally find it more reassuring as a client to have the leverage of an unpaid invoice in hand, rather than having to make an advance payment. And I believe this is more about an advance payment cleverly phrased.
We will inquire about this.
Basically, I am someone who believes that nobody should have to work for free.
However, I find the possible argument that this initial 3% should be understood as a fee for planning to be not entirely satisfactory. Until the contract is signed, it is still a project negotiation, and the total price of the house will include the fact that many people gather information and floor plans and then decide against this contractor. That is just how it is. If you buy a car, you will probably also visit several companies, gather information, and have conversations, but not buy a car everywhere. So, I do not think it is good practice to say that you actually have to pay for advice beforehand.
And for a risk as big as building a house, I generally find it more reassuring as a client to have the leverage of an unpaid invoice in hand, rather than having to make an advance payment. And I believe this is more about an advance payment cleverly phrased.
We will inquire about this.
MarcWen schrieb:
Basically an advance payment for your shell construction celebration. Maybe it's just me, but many of your responses have a rather strange tone.
I suspect that you don’t think very highly of our preferred supplier. That’s fine. As customers, we are aware that this supplier invests quite a lot in marketing, and we are also smart enough to know that, ultimately, we as customers pay for that.
Mizit schrieb:
And this is exactly the point we need to discuss again. Since no application was submitted at the time of contract signing and nothing has happened on the construction site, it can only be about a fee for the planning, or it is viewed as us, the clients, making an advance payment for the upcoming construction phases.I would appreciate it if you could ask them and I’m curious to hear what they say.
From my perspective (not as a homeowner, but as a business owner), all these standard house designs that are ready and on file—which the client or the contract refers to—have cost money during their development. These are all functional designs with, I assume, detailed planning including basic structural calculations.
This means the company has already invested in advance for its future customers. You have decided to build one of these standard houses, so you are now paying a calculated price that generally corresponds to around 3%.
However, I could be wrong about whether a homebuilding company has other intentions.
I believe the total price will definitely take these preliminary plans into account, as it simply wouldn’t make economic sense otherwise. Supermarket prices also compensate for a small percentage of theft losses.
However, it certainly feels more secure for the customer if these plans are actually reflected on the construction site as agreed in the contract, and payment is made afterward. Apparently, other companies also promote this approach.
However, it certainly feels more secure for the customer if these plans are actually reflected on the construction site as agreed in the contract, and payment is made afterward. Apparently, other companies also promote this approach.
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Bauexperte31 Jul 2016 13:55Mizit schrieb:
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Nevertheless, it certainly feels safer for the client if these plans are actually implemented on the construction site according to the contract before any payment is made. Again – what use is it to you now, after signing the construction contract? I am almost certain that you will find parts of Otus’s possible explanations in response to your question to your contract partner.How many payment installments have been agreed upon?
Regards, Bauexperte
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