Hello everyone,
we are considering changing the general contractor. The bank has already approved this. My question is, what might be disadvantages of switching? Where could potential pitfalls lie? I’m simply hoping for your experiences so we don’t overlook anything important...
Background:
We signed the contract with the general contractor in August ’16, and in December received the completed applications for the building permit, which was granted in January ’17. We informed the contractor in December ’16 that we wanted to start as soon as the weather allowed at the beginning of ’17, which they confirmed. There is no contractually fixed deadline since, due to the planned owner-occupied work (electrical, garage, and floor work on the upper floor), the contractor did not want to commit to a schedule. Since then, communication with our contractor has not been satisfactory:
Our site manager was reportedly only informed at the end of January that he was to oversee our build and has appeared unprepared at every conversation so far. (For example, in every meeting, he has asked whether we were doing any owner-occupied work or not.) He overlooks small traps I include in our correspondence.
When some of our neighbors started in the second calendar week of February, we were still chasing our site manager to find out when work would finally begin. He tried to reassure us by saying he first needed to find a construction company. I replied that this should have been done back in December, when it was already clear that the building permit would be issued in winter (the typical processing time in our area is four weeks, which was also the case here).
It dragged on until mid-March before a construction company was even found (after, reportedly, another company unexpectedly withdrew a week before the planned start date). This company then took a total of three weeks to complete the foundation slab (on a flat, shallowly excavated lot without a basement). For our neighbors, this process mostly took less than a week. “Our” workers averaged two days per week on-site, while others had workers present daily.
Since then, there has been radio silence from the construction company. I have not been able to reach the foreman for over two weeks. He does not answer calls, voicemails, or emails. Our contractor’s site manager keeps promising at short intervals that work will continue—of course, without it actually happening. Several of our neighbors, for example, are receiving their floor slabs this week….
Therefore, we have now started talks with our bank and other companies who could take over the construction for us. I have already informed our current contractor and asked him to consider a contract termination. (So far, we have paid the contractor 2% for architect services and 10% for the “foundation slab” construction phase. A penalty for contract termination would be 10% of the contract sum, although I do not consider this justified given the significant construction delays.)
we are considering changing the general contractor. The bank has already approved this. My question is, what might be disadvantages of switching? Where could potential pitfalls lie? I’m simply hoping for your experiences so we don’t overlook anything important...
Background:
We signed the contract with the general contractor in August ’16, and in December received the completed applications for the building permit, which was granted in January ’17. We informed the contractor in December ’16 that we wanted to start as soon as the weather allowed at the beginning of ’17, which they confirmed. There is no contractually fixed deadline since, due to the planned owner-occupied work (electrical, garage, and floor work on the upper floor), the contractor did not want to commit to a schedule. Since then, communication with our contractor has not been satisfactory:
Our site manager was reportedly only informed at the end of January that he was to oversee our build and has appeared unprepared at every conversation so far. (For example, in every meeting, he has asked whether we were doing any owner-occupied work or not.) He overlooks small traps I include in our correspondence.
When some of our neighbors started in the second calendar week of February, we were still chasing our site manager to find out when work would finally begin. He tried to reassure us by saying he first needed to find a construction company. I replied that this should have been done back in December, when it was already clear that the building permit would be issued in winter (the typical processing time in our area is four weeks, which was also the case here).
It dragged on until mid-March before a construction company was even found (after, reportedly, another company unexpectedly withdrew a week before the planned start date). This company then took a total of three weeks to complete the foundation slab (on a flat, shallowly excavated lot without a basement). For our neighbors, this process mostly took less than a week. “Our” workers averaged two days per week on-site, while others had workers present daily.
Since then, there has been radio silence from the construction company. I have not been able to reach the foreman for over two weeks. He does not answer calls, voicemails, or emails. Our contractor’s site manager keeps promising at short intervals that work will continue—of course, without it actually happening. Several of our neighbors, for example, are receiving their floor slabs this week….
Therefore, we have now started talks with our bank and other companies who could take over the construction for us. I have already informed our current contractor and asked him to consider a contract termination. (So far, we have paid the contractor 2% for architect services and 10% for the “foundation slab” construction phase. A penalty for contract termination would be 10% of the contract sum, although I do not consider this justified given the significant construction delays.)
The term "developer" is used in different ways. Either as a company that acts as the builder, constructs the house, and then sells it, or as, let’s say, a large planning firm that designs the houses, calculates costs, offers a fixed price, but has the buildings fully constructed by subcontractors, with the customer then being the actual builder. Team Massiv Büdelsdorf, for example, is such a company.
The problem with this type of setup is that the developer doesn’t have any trades of their own; they have to find subcontractors. And these subcontractors must be found at a price that fits the developer’s calculation. If the house has been sold very cheaply, it can be difficult nowadays to find affordable subcontractors who are willing and available to take on the work. The customer ends up dealing with the consequences. When I see how slowly houses by Heinz von Heiden or Team Massiv progress in our neighborhood, I think: this isn’t intentional, it’s because they don’t have their own companies. (Just two streets away there is one that started in 9/16... in 14 days we will probably have surpassed it in progress.)
If I didn’t have time pressure, like a lease ending on my apartment, I would be more patient and avoid burning money on legal disputes.
The problem with this type of setup is that the developer doesn’t have any trades of their own; they have to find subcontractors. And these subcontractors must be found at a price that fits the developer’s calculation. If the house has been sold very cheaply, it can be difficult nowadays to find affordable subcontractors who are willing and available to take on the work. The customer ends up dealing with the consequences. When I see how slowly houses by Heinz von Heiden or Team Massiv progress in our neighborhood, I think: this isn’t intentional, it’s because they don’t have their own companies. (Just two streets away there is one that started in 9/16... in 14 days we will probably have surpassed it in progress.)
If I didn’t have time pressure, like a lease ending on my apartment, I would be more patient and avoid burning money on legal disputes.
Nordlys schrieb:
The term "Bauträger" is used in different ways. ...Team Massiv Büdelsdorf, for example, is such a company.
...No, the term "Bauträger" has one specific meaning, as explained above.
Everything else falls under general contractors.
Many home builders, however, offer contracts both as "Bauträger" and as general contractors. TM does the same.
Ultimately, what matters is the type of contract you have and who the client is: where the rights and obligations lie.
A purchase contract with a "Bauträger" cannot simply be canceled with the assumption that you can then continue building with another company.
That’s why I’m asking... how is it possible to provide good information here without knowing the contract details?
Best regards in brief
Nordlys schrieb:
.
The problem with this type of construction is that the developer does not have their own trades; they have to find subcontractors. We built with a developer who handled earthworks, civil engineering, shell construction, plumbing, and roofing themselves. In addition, a site foreman and the project manager from their company were always present on site. So it is not necessarily as you describe. In fact, the absence of this kind of subcontractor structure was one reason we chose this developer.
B
Bieber081526 Apr 2017 14:31ypg schrieb:
Many individual home builders offer contracts both as developers and as general contractors. TM does as well.It should be added that this is essentially mutually exclusive: Either the client owns the land. Then the "home building company" will offer a contract for work and act as the general contractor or main contractor. Or the "home building company" owns the land. In that case, it can only act as a developer. Anything else would be dishonest (a disguised client model) and does not occur in reputable construction circles :P.77.willo schrieb:
And precisely the absence of these subcontractor structures was a reason for us to choose this developer.Then there are developers who only act as planning offices and provide the construction manager but still deliver good quality. In our case, I would say this was achieved because no random subcontractors are hired, but rather reliable and well-known companies and craftsmen who regularly work for this developer. Ultimately, architects also have to find "subcontractors," so the same criticism could be made there.C
Caspar202026 Apr 2017 14:54A property developer builds houses on the land they have purchased, meaning the developer also acts as the client. They sell the house together with the land. The sale can take place before construction starts, during the building phase, or after completion. In short: the developer is the client, and you are simply the buyer.
A turnkey contractor (general turnkey contractor) differs from a general contractor in that they take on all construction services, including planning. The architect, specialist planners, trade contractors, etc., are hired by the turnkey contractor as subcontractors. This means you are the client, and the turnkey contractor is the sole contractor.
With a general contractor, you hire them and separately hire an architect/planner. The various trade contractors (subcontractors) are hired by the general contractor and have a contractual relationship with them. Planning and supervision of your building project are the responsibility of the architect you have hired.
There is also the option of contracting each trade individually with an architect. In this case, you basically manage all contracts yourself (or with your architect). You also act as the client.
Of course, the turnkey contractor/general contractor/developer can also carry out the work themselves without subcontractors. But they can also outsource almost all tasks. However, the question of whether subcontractors are used or not does not affect whether you have a turnkey contractor/general contractor/developer as your point of contact.
I think what ypg means is when you bring a plot of land into the situation, and companies acting as turnkey contractors who also do the planning and build the house, but who also buy land themselves and market and develop these as developers, finally handing over the property to the buyer.
A turnkey contractor (general turnkey contractor) differs from a general contractor in that they take on all construction services, including planning. The architect, specialist planners, trade contractors, etc., are hired by the turnkey contractor as subcontractors. This means you are the client, and the turnkey contractor is the sole contractor.
With a general contractor, you hire them and separately hire an architect/planner. The various trade contractors (subcontractors) are hired by the general contractor and have a contractual relationship with them. Planning and supervision of your building project are the responsibility of the architect you have hired.
There is also the option of contracting each trade individually with an architect. In this case, you basically manage all contracts yourself (or with your architect). You also act as the client.
Of course, the turnkey contractor/general contractor/developer can also carry out the work themselves without subcontractors. But they can also outsource almost all tasks. However, the question of whether subcontractors are used or not does not affect whether you have a turnkey contractor/general contractor/developer as your point of contact.
Bieber0815 schrieb:
One should add that this actually excludes the other case: Either the customer owns a plot of land. Then the "house-building company" offers a construction contract and acts as a general contractor or turnkey contractor. Or the "house-building company" owns the land itself.
I think what ypg means is when you bring a plot of land into the situation, and companies acting as turnkey contractors who also do the planning and build the house, but who also buy land themselves and market and develop these as developers, finally handing over the property to the buyer.
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