Hello,
About a year ago, my girlfriend commissioned a prefabricated house. After some back and forth with the building plans and permits, construction work was supposed to start this winter. However, for personal and professional reasons, she has now decided not to proceed with building the house and has canceled the contract with the construction company.
Almost all the work completed so far was outsourced and paid for by her. She has now received an invoice from the construction company listing only 3 hours of structural engineer work as actual labor. The largest portions, however, are overhead and profit. Many items are shown with varying percentage allocations, with the profit actually listed at 100%.
In total, the costs demanded by the construction company amount to 15–20% of the total price for the completed house.
She is quite distressed at the moment, so I am trying to find out to what extent this is legally justified and whether there are options to challenge it.
This is definitely not about trying to avoid costs. It is clear that she will not be released from the contract free of charge. But such an incredibly high bill with many fictitious costs, despite almost no actual work having been done so far, and a 100% profit share is hard for us to understand.
Can you help us and provide advice?
THANK YOU!
About a year ago, my girlfriend commissioned a prefabricated house. After some back and forth with the building plans and permits, construction work was supposed to start this winter. However, for personal and professional reasons, she has now decided not to proceed with building the house and has canceled the contract with the construction company.
Almost all the work completed so far was outsourced and paid for by her. She has now received an invoice from the construction company listing only 3 hours of structural engineer work as actual labor. The largest portions, however, are overhead and profit. Many items are shown with varying percentage allocations, with the profit actually listed at 100%.
In total, the costs demanded by the construction company amount to 15–20% of the total price for the completed house.
She is quite distressed at the moment, so I am trying to find out to what extent this is legally justified and whether there are options to challenge it.
This is definitely not about trying to avoid costs. It is clear that she will not be released from the contract free of charge. But such an incredibly high bill with many fictitious costs, despite almost no actual work having been done so far, and a 100% profit share is hard for us to understand.
Can you help us and provide advice?
THANK YOU!
I don’t think the demand is unrealistic. They will have to pay damages, which, in addition to the services already provided, includes lost profits (possibly minus risk).
They can offer 10%. Maybe that will work. Less than that is very unlikely; you should consider consulting a specialist lawyer and going to court to get full insight into the calculation.
They should have built it themselves or at least sought advice beforehand! The bank will also take action again if they have already finalized a construction loan.
They can offer 10%. Maybe that will work. Less than that is very unlikely; you should consider consulting a specialist lawyer and going to court to get full insight into the calculation.
They should have built it themselves or at least sought advice beforehand! The bank will also take action again if they have already finalized a construction loan.
S
SaniererNRW1239 Aug 2022 21:03Davy1983 schrieb:
It is obvious that they won’t be released from the contract free of charge. But such an unbelievably high bill with many fictitious costs, although hardly any actual work has been done so far and with a 100% profit margin, is hard for us to understand. I don’t want to repeat what’s already been said, but this is property. It is normal for terminating a contract to involve “unbelievably” high costs. The exact amount can certainly be disputed, but as a builder, I do expect to receive both my profit and overhead costs. After all, I am running an entire business.
Legally, certainly – but considering that some construction companies nowadays try to charge their clients five-figure sums to get out of contracts, the amount is definitely worth questioning. As far as I know, the contractor must disclose their calculated profit. This means they need to open up their cost accounting and provide proof with current invoices for materials and so on. Depending on the exact age of the contract, I could imagine that a 15-20% margin on material prices for the contractor might not have been achieved, but I could be wrong, as some raw material prices are currently falling again.
I would either withdraw from the termination and follow through (and then just sell or rent out) or go fully on the offensive. I definitely wouldn’t just accept it.
I would either withdraw from the termination and follow through (and then just sell or rent out) or go fully on the offensive. I definitely wouldn’t just accept it.
kbt09 schrieb:
What does the contract say about termination? That usually specifies what payments are due.@TE: We’re all basically waiting for the answer.