ᐅ Just before signing a contract with a construction company, what should be considered?
Created on: 6 Jul 2017 00:17
F
flibusterx1
Hello,
I am potentially about to sign a contract with a construction company. I have very little knowledge about this subject. Because of this—or perhaps despite it—I have developed quite a few doubts.
Here is the situation: The construction company found a plot of land for us, and together we have planned a house. Nothing has been signed yet, but we have worked on our floor plan (which was revised twice by a draftsman). The house is allowed to be built only with a gable roof, 1½ stories, with a net floor area of 192 m² (2,067 sq ft) and living space of 177 m² (1,905 sq ft), with a ceiling height of 2.6 m (8.5 ft) on the ground floor.
We have looked at the houses this company builds and have had one conversation with people who have built with this company. After the conversation, it felt as if it was not 100% objective. The construction company appears confident and is not cheap.
Now to my doubts:
- The plot is located so that we need a lifting station . This is supposed to cost 5,000 (EUR) including installation and allegedly cannot be avoided.
- Heating. Gas heating is not possible on the property, so we would opt for a ground-source heat pump. The construction company wants to sell us one through an affiliated company. It is a heat pump with a horizontal ground collector using trench collectors. The price, including underfloor heating installation/insulation, screed, washing machine with the combined stratified storage tank, and cooling function, is a hefty 49,700 (EUR).
The information about this heat pump is not very clear. For example, it does not explain exactly how this combined stratified storage tank works or its advantages and disadvantages. The individual room controls probably will not work in all rooms, which was not mentioned. I also don’t fully understand whether the heat pump system is monovalent or not.
The specifications I have are:
Heating output in kW at 0°C/35°C: 8.9 kW
1 refrigerant flow meter for determining COP building heating load approx. in kW: 6.35. Does this mean the COP value? Is 6.35 even credible?
- For the LAS-chimney including cladding, cleaning cap in the hallway, attic ladder, roof exit window with safety grating, walkway in the attic, wiring/switch/outlet in the attic, and air pressure monitor, we were charged 9,000 (EUR). Is this reasonable?
- We have not seen any survey report or similar for the plot. How necessary is this?
- We do not yet know exactly which fees/permits are included in the price and which are not. Changes to the floor plan should be free until the building permit / planning permission stage.
- A private road will lead to the plot. It is not yet clear how rainwater will be managed (each plot apparently needs its own lifting station for wastewater, which operates independently). What costs will arise for the 7 houses planned on the site? Does anyone have experience with this? For example, with waste collection or possible maintenance? What else should be considered?
Now about the price – including all special requests (chimney, heat pump, sauna preparation, 3 showers, large windows with external blinds at the bottom), we are at 333,000 (EUR) for the house alone.
The seller is increasingly pressing us to sign the contract. One can understand this; he has worked “for free” so far. My biggest doubts are about the heat pump and the lifting station. The seller says we got the plot too quickly and do not appreciate how difficult it is right now in Leipzig; it could take years for the next opportunity.
The plot costs almost 200,000 (EUR), so the whole project will be around 600,000 (EUR), and I think having some doubts is healthy 🙂
I feel like I have about one week to give him the answer whether we will proceed or not.
What questions should I clarify now? What do you think about all of this? I’m happy to provide any information I have, though I would prefer not to name the companies at this stage.
I would be very grateful for any tips, criticism, or advice!
I am potentially about to sign a contract with a construction company. I have very little knowledge about this subject. Because of this—or perhaps despite it—I have developed quite a few doubts.
Here is the situation: The construction company found a plot of land for us, and together we have planned a house. Nothing has been signed yet, but we have worked on our floor plan (which was revised twice by a draftsman). The house is allowed to be built only with a gable roof, 1½ stories, with a net floor area of 192 m² (2,067 sq ft) and living space of 177 m² (1,905 sq ft), with a ceiling height of 2.6 m (8.5 ft) on the ground floor.
We have looked at the houses this company builds and have had one conversation with people who have built with this company. After the conversation, it felt as if it was not 100% objective. The construction company appears confident and is not cheap.
Now to my doubts:
- The plot is located so that we need a lifting station . This is supposed to cost 5,000 (EUR) including installation and allegedly cannot be avoided.
- Heating. Gas heating is not possible on the property, so we would opt for a ground-source heat pump. The construction company wants to sell us one through an affiliated company. It is a heat pump with a horizontal ground collector using trench collectors. The price, including underfloor heating installation/insulation, screed, washing machine with the combined stratified storage tank, and cooling function, is a hefty 49,700 (EUR).
The information about this heat pump is not very clear. For example, it does not explain exactly how this combined stratified storage tank works or its advantages and disadvantages. The individual room controls probably will not work in all rooms, which was not mentioned. I also don’t fully understand whether the heat pump system is monovalent or not.
The specifications I have are:
Heating output in kW at 0°C/35°C: 8.9 kW
1 refrigerant flow meter for determining COP building heating load approx. in kW: 6.35. Does this mean the COP value? Is 6.35 even credible?
- For the LAS-chimney including cladding, cleaning cap in the hallway, attic ladder, roof exit window with safety grating, walkway in the attic, wiring/switch/outlet in the attic, and air pressure monitor, we were charged 9,000 (EUR). Is this reasonable?
- We have not seen any survey report or similar for the plot. How necessary is this?
- We do not yet know exactly which fees/permits are included in the price and which are not. Changes to the floor plan should be free until the building permit / planning permission stage.
- A private road will lead to the plot. It is not yet clear how rainwater will be managed (each plot apparently needs its own lifting station for wastewater, which operates independently). What costs will arise for the 7 houses planned on the site? Does anyone have experience with this? For example, with waste collection or possible maintenance? What else should be considered?
Now about the price – including all special requests (chimney, heat pump, sauna preparation, 3 showers, large windows with external blinds at the bottom), we are at 333,000 (EUR) for the house alone.
The seller is increasingly pressing us to sign the contract. One can understand this; he has worked “for free” so far. My biggest doubts are about the heat pump and the lifting station. The seller says we got the plot too quickly and do not appreciate how difficult it is right now in Leipzig; it could take years for the next opportunity.
The plot costs almost 200,000 (EUR), so the whole project will be around 600,000 (EUR), and I think having some doubts is healthy 🙂
I feel like I have about one week to give him the answer whether we will proceed or not.
What questions should I clarify now? What do you think about all of this? I’m happy to provide any information I have, though I would prefer not to name the companies at this stage.
I would be very grateful for any tips, criticism, or advice!
F
flibusterx16 Jul 2017 12:59@Otus – what does VT mean? What is the best/fastest/most effective way to carry out such an inspection?
The ceiling should be 2.62 meters (8 ft 7 in) high in the finished house, of course, as stated in the cost summary. But thanks, I prefer to ask.
The ceiling should be 2.62 meters (8 ft 7 in) high in the finished house, of course, as stated in the cost summary. But thanks, I prefer to ask.
VT = contract
Make an appointment with the consumer advice center / get informed beforehand.
Or consult a specialized lawyer for private construction law, starting at 250 EUR net per hour. They will also know various experts (some of these costs can partly be reimbursed by the KfW if applied for there before execution).
Most construction contracts are full of invalid clauses; however, these are rarely changed in advance – usually, the "buyer" is replaced instead.
So the main goal is to identify the real "showstoppers."
Clarify whether the developer contract or separate land / construction contract will be used.
Be cautious with project companies without financial substance (they tend to enter insolvency proceedings in case of major defects).
Also, clarify the ceiling height on the ground floor.
I would not go below 2.70 m (8 ft 10 in) from the finished floor surface in large rooms – that corresponds to about 2.95 m (9 ft 8 in) raw height.
Make an appointment with the consumer advice center / get informed beforehand.
Or consult a specialized lawyer for private construction law, starting at 250 EUR net per hour. They will also know various experts (some of these costs can partly be reimbursed by the KfW if applied for there before execution).
Most construction contracts are full of invalid clauses; however, these are rarely changed in advance – usually, the "buyer" is replaced instead.
So the main goal is to identify the real "showstoppers."
Clarify whether the developer contract or separate land / construction contract will be used.
Be cautious with project companies without financial substance (they tend to enter insolvency proceedings in case of major defects).
Also, clarify the ceiling height on the ground floor.
I would not go below 2.70 m (8 ft 10 in) from the finished floor surface in large rooms – that corresponds to about 2.95 m (9 ft 8 in) raw height.
F
flibusterx16 Jul 2017 13:35@Orus11, can I ask the consumer advice center if $9,000 for the chimney is reasonable and also if the lifting station/heat pump being sold to us is significantly more expensive than the competition while perhaps being less effective? These are the issues that worry me the most.
And what can be done if the answers to these questions are not in favor of the construction company?
And what can be done if the answers to these questions are not in favor of the construction company?
When it comes to technical questions, expert knowledge needs to be outsourced – whether they are familiar with market prices is another matter.
Professionals in this field handle many contracts as part of their job and can usually assess them quite well.
In general: get used to excessive markups, especially in the plumbing trade... Toilet bowls that are sold online for $200 - $250 are easily charged as an additional $600 - $700 when selected during the planning phase (the standard cost is already included in the overall house price)... In other words: if you source everything from one provider, prices quickly become unreasonably high. The alternative is to contract yourself or go through an architect.
If the experts’ answers are disappointing, it is up to YOU to draw the necessary conclusions – or to act accordingly, depending on your risk tolerance and financial resources.
Professionals in this field handle many contracts as part of their job and can usually assess them quite well.
In general: get used to excessive markups, especially in the plumbing trade... Toilet bowls that are sold online for $200 - $250 are easily charged as an additional $600 - $700 when selected during the planning phase (the standard cost is already included in the overall house price)... In other words: if you source everything from one provider, prices quickly become unreasonably high. The alternative is to contract yourself or go through an architect.
If the experts’ answers are disappointing, it is up to YOU to draw the necessary conclusions – or to act accordingly, depending on your risk tolerance and financial resources.
F
flibusterx16 Jul 2017 14:05Thank you for these tips!
I was able to negotiate with the construction company that all the sanitary fixtures, tiles, interior plaster, and possibly the staircase will be done by me in exchange for a credit. Fortunately, I know someone from Eastern Europe who has a team, and they do this work very well and affordably.
For complicated things like the heat pump, I’m powerless. But I would definitely like to discuss the price of $50,000 and compare the specifications with someone. In my opinion, the efficiency of the heat pump is not impressive—it’s supposed to consume about 4500 kWh of electricity for our 177 m² (1905 sq ft). The construction company insists these are top values...
Today, I will definitely look for an expert and listen to their opinion on this.
I was able to negotiate with the construction company that all the sanitary fixtures, tiles, interior plaster, and possibly the staircase will be done by me in exchange for a credit. Fortunately, I know someone from Eastern Europe who has a team, and they do this work very well and affordably.
For complicated things like the heat pump, I’m powerless. But I would definitely like to discuss the price of $50,000 and compare the specifications with someone. In my opinion, the efficiency of the heat pump is not impressive—it’s supposed to consume about 4500 kWh of electricity for our 177 m² (1905 sq ft). The construction company insists these are top values...
Today, I will definitely look for an expert and listen to their opinion on this.
Hello,
Lindental is not directly under the flight path, but quite close.
Leipzig is primarily a cargo airport. The small amount of daytime passenger traffic is mostly a facade to secure subsidies. The highest "passenger numbers" were recorded during the Iraq and Afghanistan wars, when many American soldiers transferred in Leipzig on their way to deployment.
Most air traffic happens at night, roughly between 10:00 PM and 5:00 AM, if I remember the flight schedules correctly. We were involved in planning the DHL Express hub.
The cargo planes are generally somewhat older and therefore louder. DHL Express has several modern 777s in Leipzig, which are quieter, but the rest mostly belong to the heavy metal category.
There are also two or three Antonov 124s based there, which probably aren’t very quiet either.
So if you want to get a real sense of the noise, you might want to visit the property at night – that could be much more revealing.
Best regards,
Andreas
flibusterx1 schrieb:
No idea how bad the airplane noise really is there, we visited four times at different times of day, and it was very quiet.
Lindental is not directly under the flight path, but quite close.
Leipzig is primarily a cargo airport. The small amount of daytime passenger traffic is mostly a facade to secure subsidies. The highest "passenger numbers" were recorded during the Iraq and Afghanistan wars, when many American soldiers transferred in Leipzig on their way to deployment.
Most air traffic happens at night, roughly between 10:00 PM and 5:00 AM, if I remember the flight schedules correctly. We were involved in planning the DHL Express hub.
The cargo planes are generally somewhat older and therefore louder. DHL Express has several modern 777s in Leipzig, which are quieter, but the rest mostly belong to the heavy metal category.
There are also two or three Antonov 124s based there, which probably aren’t very quiet either.
So if you want to get a real sense of the noise, you might want to visit the property at night – that could be much more revealing.
Best regards,
Andreas
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