Hello again,
here is the situation: The construction company has informed us that there will likely be a two-month delay (move-in ready beginning of February instead of the planned end of November) and admits that it is their fault (they started too late overall). They want to compensate us for the two months by covering our ongoing apartment rent as well as the resulting construction loan interest during this period. Condition: If we carry out any work on the house ourselves during the delay period (i.e., December/January), such as painting preparation while the screed is drying or laying vinyl after the screed has dried, they will reduce the compensation by four weeks.
The company justifies this as a form of protection in case we accidentally cause any damage through our work, arguing that the house remains their property more or less until full completion.
Question: Is this common practice? Is it regulated by law? So far, these arrangements have only been communicated verbally; we have requested a written document and are still waiting, as the manager is apparently on vacation... [To clarify beforehand: No contractual penalty was agreed upon.]
here is the situation: The construction company has informed us that there will likely be a two-month delay (move-in ready beginning of February instead of the planned end of November) and admits that it is their fault (they started too late overall). They want to compensate us for the two months by covering our ongoing apartment rent as well as the resulting construction loan interest during this period. Condition: If we carry out any work on the house ourselves during the delay period (i.e., December/January), such as painting preparation while the screed is drying or laying vinyl after the screed has dried, they will reduce the compensation by four weeks.
The company justifies this as a form of protection in case we accidentally cause any damage through our work, arguing that the house remains their property more or less until full completion.
Question: Is this common practice? Is it regulated by law? So far, these arrangements have only been communicated verbally; we have requested a written document and are still waiting, as the manager is apparently on vacation... [To clarify beforehand: No contractual penalty was agreed upon.]
Hi,
Then it’s your house, and you can do whatever you want there at any time. Since the construction company is not obliged to pay you anything, they can of course claim your own work as justification. Although that doesn’t make much sense, legally they don’t have to pay anything anyway.
Typical compensation amounts are usually between €100 per day and up to 1/1000 of the total construction cost, so up to €300–400 per day. The lower amount is meant only to cover your additional expenses, while the higher is a genuine contractual penalty.
I think you should follow Payday’s advice and try to maintain a good working relationship. If you can’t do any work in the house for two months without losing the compensation payment, the construction period will be extended even further. A different solution should be found.
Best regards,
Andreas
LuziEva schrieb:
GU!
Same here
Thanks for the reply!
Then it’s your house, and you can do whatever you want there at any time. Since the construction company is not obliged to pay you anything, they can of course claim your own work as justification. Although that doesn’t make much sense, legally they don’t have to pay anything anyway.
Typical compensation amounts are usually between €100 per day and up to 1/1000 of the total construction cost, so up to €300–400 per day. The lower amount is meant only to cover your additional expenses, while the higher is a genuine contractual penalty.
I think you should follow Payday’s advice and try to maintain a good working relationship. If you can’t do any work in the house for two months without losing the compensation payment, the construction period will be extended even further. A different solution should be found.
Best regards,
Andreas
B
Bauexperte17 Oct 2016 14:18andimann schrieb:
Then it’s your house and you can do whatever you want there at any time. Please don’t say this _before_ you know who holds the house rights! If it lies with the general contractor (GC), the original poster (OP) might be the last to act on your advice in the worst-case scenario!
andimann schrieb:
Typical compensation amounts are probably between €100 / day up to 1/1000 of the construction cost, so up to €300-400 / day. This is also not correct. The industry standard is €50.00 / working day; capped at a maximum of 5% of the total construction cost.
Best regards, Bauexperte
Payday schrieb:
It’s great that they are being so accommodating to you—even though no construction period was agreed upon. The reason they want to cut you one month again is obviously nonsense.
If the delay was only admitted verbally, it will be difficult to enforce legally. Still, maintaining a good working relationship is clearly the goal.
What do you plan to do there during that time?!Stop—there was a construction period agreed upon! According to the contract, the completion date was supposed to be November 22. Since the end of September, we have known this won’t happen because only then (yes, only then) did we receive a construction schedule, which sets the completion date around the fourth week of 2017. It was just not contractually specified what would happen if the deadline was missed.
Regarding the painting work during the drying phase: Our painter said he would like to prepare and plaster the ceilings during that time, and it would be easier for him if the tiles were not yet installed, as he wouldn’t have to tape off the floor, etc.
Regarding house access rights: We have a clause in the contract stating that we may enter the property/house at any time without prior notice… I’m not sure if you mean this by “house rights” or something else?
Again: Thanks for your many and quick responses! As mentioned, we are happy that the company itself is offering something (we are still very satisfied with their work and would gladly build with them again)—we are just considering which approach makes more sense: taking full compensation and “doing nothing” or accepting less compensation and “doing something.”
Hi Bauexperte,
Our contract explicitly states that I am allowed to enter the construction site at any time. Who in their right mind would lock someone out of their own property?
I have no authority to instruct the tradespeople and could only remove them with substantial effort.
But it would be a pretty absurd situation if the contractor were to deny the client access.
However, that is not really the point for the original poster – they just want to work without disturbance.
And 50 € per working day would amount to 1,000 or 1,200 € per month. That is not a penalty clause, not even compensation for rent or hotel costs!
That would be more like a bad joke!
In fact, it might even be financially attractive for the general contractor to leave a site inactive and focus on others instead.
The 1/1000 per day is supposed to be a contractual penalty, designed to create pressure. That quickly adds up to 9,000–12,000 € per month and actually starts to hurt.
Our contract stipulates 100 € per calendar day without any cap. That is still well below 1/1000 but would somewhat balance any extra costs.
In my professional projects, 1–2/1000 per day is quite common and actually rather on the low side.
Best regards,
Andreas
Bauexperte schrieb:
Please don’t write that _before_ you know who holds the right of access to the site! If it lies with the general contractor, in the worst case the original poster is last, especially if they follow your advice!
That’s also not true. The industry standard is usually €50.00/working day, capped at a maximum of 5% of the construction cost.
Best regards, Bauexperte
Our contract explicitly states that I am allowed to enter the construction site at any time. Who in their right mind would lock someone out of their own property?
I have no authority to instruct the tradespeople and could only remove them with substantial effort.
But it would be a pretty absurd situation if the contractor were to deny the client access.
However, that is not really the point for the original poster – they just want to work without disturbance.
And 50 € per working day would amount to 1,000 or 1,200 € per month. That is not a penalty clause, not even compensation for rent or hotel costs!
That would be more like a bad joke!
In fact, it might even be financially attractive for the general contractor to leave a site inactive and focus on others instead.
The 1/1000 per day is supposed to be a contractual penalty, designed to create pressure. That quickly adds up to 9,000–12,000 € per month and actually starts to hurt.
Our contract stipulates 100 € per calendar day without any cap. That is still well below 1/1000 but would somewhat balance any extra costs.
In my professional projects, 1–2/1000 per day is quite common and actually rather on the low side.
Best regards,
Andreas
LuziEva schrieb:
Stop – a construction timeline was agreed upon! According to the contract, the completion date was supposed to be November 22. Since the end of September, we have known that this won’t be met, as only then (yes, only then) we received a construction schedule indicating around the 4th week of 2017 as the completion date. However, it was simply not contractually specified what exactly happens in case of non-compliance.So, if the guaranteed construction period has already expired, your chances are naturally better. However, I am not sure about the legal regulations. In our mechanical engineering sector, 1% of the total contract amount per week (up to a maximum of 5%) is common.
You are definitely at a significant advantage now that the guaranteed construction period has expired. As I said before, maintaining a reasonable mutual understanding is more important than stress. If you want to complete the ceilings during this time, clarify this with them in a firm yet reasonable manner. It really makes sense to have the ceilings finished before the tiler comes.
Also, clarify beforehand how much you would theoretically be entitled to. That way, you have a starting point.
But do these legal regulations apply if we have not agreed on them in the contract? I thought such provisions are considered penalties and must be explicitly stated in writing within the contract.
Quotes from our contract, as mentioned, without penalty clauses:
The completion of the construction project according to the agreed scope of work shall occur no later than 10 months after submission of the building permit / planning permission or building clearance, plus any possible bad weather days during the winter half-year.
Should changes or additions to this contract arise due to official requirements or technical necessities, the contractor shall notify the client in writing. Resulting delays in completion shall be at the client’s expense, as are any other delays caused by the client.
The client authorizes the contractor to take all necessary public-law measures required for the execution of the construction. During the execution of the construction project, the contractor and the client exercise joint control over the construction site.
Also, a quote from our construction services description:
Owner-provided work is generally possible after written agreement, whereby such work is not covered by the general contractor’s warranty. It must be communicated before construction begins and must include a complete trade. The execution schedule must be adjusted to the overall timeline and coordinated with the site management.
In summary, this seems to be one statement against another, right? On the one hand, we should have notified owner-provided work before construction started (see construction services description); on the other hand, we have control over the site and can do whatever we want...?
Quotes from our contract, as mentioned, without penalty clauses:
The completion of the construction project according to the agreed scope of work shall occur no later than 10 months after submission of the building permit / planning permission or building clearance, plus any possible bad weather days during the winter half-year.
Should changes or additions to this contract arise due to official requirements or technical necessities, the contractor shall notify the client in writing. Resulting delays in completion shall be at the client’s expense, as are any other delays caused by the client.
The client authorizes the contractor to take all necessary public-law measures required for the execution of the construction. During the execution of the construction project, the contractor and the client exercise joint control over the construction site.
Also, a quote from our construction services description:
Owner-provided work is generally possible after written agreement, whereby such work is not covered by the general contractor’s warranty. It must be communicated before construction begins and must include a complete trade. The execution schedule must be adjusted to the overall timeline and coordinated with the site management.
In summary, this seems to be one statement against another, right? On the one hand, we should have notified owner-provided work before construction started (see construction services description); on the other hand, we have control over the site and can do whatever we want...?
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