ᐅ General contractor requests price increase for the entire house
Created on: 6 Oct 2022 15:33
M
MSHausbau
Hello everyone,
I’ve read a lot and hope to get some advice...
We are building a house and are about 90% finished. The fixed price agreement expires at the end of October, and the contract doesn’t specify what happens afterward.
Now our general contractor is asking for €50,000.
His reasoning: As of today, the house is 18.66% more expensive, which is €51,250, so he is demanding €50,000 from us.
He already indicated over the phone that it probably won’t be the full 50K, but the 10K we offered was too low.
Now the question is, are we completely mistaken? I don’t see why we should pay extra for the entire house, only for the items that are still outstanding. That would be about €8,000 if you really apply the 18%.
Do you understand what I mean?
Does anyone have legal experience or some tips on how to argue this?
Our lawyer advises settling in the range of €15,000 to €20,000.
I’ve read a lot and hope to get some advice...
We are building a house and are about 90% finished. The fixed price agreement expires at the end of October, and the contract doesn’t specify what happens afterward.
Now our general contractor is asking for €50,000.
His reasoning: As of today, the house is 18.66% more expensive, which is €51,250, so he is demanding €50,000 from us.
He already indicated over the phone that it probably won’t be the full 50K, but the 10K we offered was too low.
Now the question is, are we completely mistaken? I don’t see why we should pay extra for the entire house, only for the items that are still outstanding. That would be about €8,000 if you really apply the 18%.
Do you understand what I mean?
Does anyone have legal experience or some tips on how to argue this?
Our lawyer advises settling in the range of €15,000 to €20,000.
MSHausbau schrieb:
I find that surprising. How does he intend to keep the prices stable? Especially in today’s market… By now, we are quite familiar with our current builder and have discussed this with him. He said that everything has indeed become extremely expensive. For him, a lot depends on available liquidity. Basically, as soon as we shook hands to signal that we wanted to build with him, he ordered the heat pump—weeks before signing the contract. Otherwise, he’s also buying more building materials for stock than he used to, when he would have simply purchased them during the construction phase. He added that the rest is part of his business risk; the rising prices were foreseeable, and he calculated accordingly. Here is an excerpt from our contract:
M
MSHausbau6 Oct 2022 20:28xMisterDx schrieb:
Do you know the King of Queens episode where Douglas drinks vodka with the mold remediation company and makes a fool of himself so they come back and finish the job? That’s basically what you can imagine here.
Talk calmly to the manager and make it clear that your money is limited and that it’s not a small amount to just write off. You’ll probably get much further with some emotional appeal and calm words than with a lawyer, confrontation, and a ruling from the Higher Regional Court of Hamm that you as a layperson probably won’t fully understand.
Keep in mind:
Even if you’re legally right, it can take years to win a final ruling, and the general contractor might not even be around anymore by then... It’s currently quite likely that some companies won’t survive the crisis. Can you afford to fight a legal battle for years? Is that what you want? I haven’t watched much King of Queens…
I guess no one really wants a legal battle. That’s why I’ll just leave it for tomorrow’s phone call.
M
MSHausbau6 Oct 2022 20:30kati1337 schrieb:
We are now quite familiar with our current situation and have discussed it as well.
He said that everything has become extremely expensive. For him, much is possible due to available liquidity. Basically, he had already ordered the heat pump weeks before signing the contract, right after we gave him a handshake to signal that we wanted to build with him. He also buys more building materials in stock now, which he would normally have just purchased as needed during the construction phase. He said the rest is his business risk; the rising prices were foreseeable, and he calculated accordingly. This is an excerpt from our contract:
That’s a reasonable clause. Not nonsense like I had... If I ever build again (which I hope not), I’ll pay more attention to things like that.
H
hauskauf19876 Oct 2022 20:32MSHausbau schrieb:
I think the lawyer just wants to protect us from a legal dispute.
I also informed him about the disclosure. He immediately said he wouldn’t do it. I will tell him tomorrow that if it goes to court, he will have to disclose everything anyway.
In my opinion, a price increase is not meant for that. It’s meant to compensate for the increased cost of materials. Of course, he has to disclose something...
Strange response, I would politely(!) decline the additional costs.
No threats, no anger, a legal dispute benefits no one. However, based on your replies here, I would not pay a single cent more.
MSHausbau schrieb:
That’s a reasonable clause. Not the kind of nonsense I had…
If I ever build again (which I hope I don’t), I’ll pay more attention to things like that. I was also pleasantly surprised when I saw the first draft of the contract. I believe this is quite rare nowadays; he also emphasized several times during the initial discussions that by fixed price, he really means fixed price.
However, you can manage even with less explicit clauses, but I would be cautious with any time limitations. Still, it’s pointless to argue over spilt milk afterwards.
I think, in the end, both sides involved are interested in reaching an amicable agreement. A solution can be built on that foundation.
X
xMisterDx6 Oct 2022 20:34hauskauf1987 schrieb:
Of course, he has to disclose something...
Strange response, I would politely (!) decline any additional costs.
No threats, no anger – legal disputes don’t help anyone. However, based on your answers here, I wouldn’t pay a single cent more.But then don’t be surprised if there is zero progress (zero in words) on the house in the coming months. This does not count towards the construction time guarantee, as the client has not settled an issued invoice.