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.
andimann schrieb:
Using the contractor’s reasoning, he could also delay installing the doorbell for 10 years and then demand the house price from you after 10 years. (Yes, that’s an exaggeration, but that’s essentially where it leads.) You’ve described the method (of billing for development and road construction contributions) very clearly ;-).
kati1337 schrieb:
It’s similar to how you pay instalments for your gas consumption throughout the year, but what counts in the end is the annual statement. With gas consumption, however, it’s easy to take an interim meter reading if prices increase, because the meter measures the actual consumption…
MSHausbau schrieb:
But I also don’t see why I should pay more for the entire house. Only for the trades or the items in the payment schedule that are still open. … whereas the payment schedule is only designed to balance instalments with the contractor’s cash flow due to advance work, and is not suitable for settling a hypothetical “partial completion”. In that respect, the comparison is “system-imposed”.
kati1337 schrieb:
I’ve already signed two general contractor contracts, and neither of them included an expiration of the price guarantee.
I consider that unprofessional, especially the explicitly short period of 12 months in your contract. A price guarantee being “off limits” would be sheer madness – only very large providers survive that, and even they don’t always. The duration is reasonable, but when it starts, consumers tend to confuse the difference between stopping distance and reaction time.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
F
fromthisplace6 Oct 2022 20:36MSHausbau schrieb:
I find that surprising. How does he plan to keep prices stable? Especially in times like these… Initial meeting: January 2021
Contract signed: August 2021
Construction start: January 2022
Price increase during this period due to force majeure (COVID waves, raw material shortages, war and its impact): 0 euros
Our biggest frustration so far was that the plasterers ruined a window key. 🙂
M
MSHausbau6 Oct 2022 20:37I want to reach an agreement that is reasonable for both sides, but only in areas we want and are able to pay for. I’m looking forward to tomorrow. I will report back 🙂
11ant schrieb:
A fixed price with a cutoff point would be pure madness – at best, only very large contractors would survive, and even then not always. The duration is acceptable, but consumers often forget the difference between braking distance and total stopping distance when it comes to the start of the deadline.That would have to be the start of construction, right? Otherwise, it wouldn’t make sense. Building permits or planning permission can take months. Many construction companies have 12 months as the construction time in the contract, some even excluding the winter months, so more like 15 months. It’s predictable that the 12 months will be exceeded.
And even if the deadline started at construction commencement, I still find it very one-sided as a contract clause. Ultimately, only the contractor has control over the time needed until completion. They could easily delay 1-2 weeks between each trade and then add a big surcharge on the former “fixed price” after month 14.
H
hauskauf19876 Oct 2022 20:40xMisterDx schrieb:
But don’t be surprised if there is no progress at all (zero, spelled out) on the house in the coming months.
This is not covered by the construction time guarantee, since the client has not paid an issued invoice. Maybe there are others like you, so it’s no wonder that the builders react that way!
There is probably a construction schedule. When is the builder supposed to be finished? What work still needs to be done?
Have any retainage payments already been made?
Be prepared for everything, but of course start with a conversation first.
X
xMisterDx6 Oct 2022 20:42fromthisplace schrieb:
Initial meeting: January 2021
Contract signing: August 2021
Construction start: January 2022
Price increase during this period due to force majeure (COVID-19 waves, raw material shortages, war and its effects): 0 Euros
Our biggest annoyance so far was that the plasterers messed up a window key. 🙂Well, that’s no surprise, because by far the largest price increase happened in 2021, and you were already involved then.
We signed in November 2020; the fixed price period ran until November 2021, and the increase was 15%.
The people around us who signed with the same general contractor in June/July/August 2021 as “new customers” paid an even higher surcharge; for us, they were generous and gave a 5% discount…
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