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.
X
xMisterDx6 Oct 2022 20:44hauskauf1987 schrieb:
There are probably others like you, so it’s no surprise that the contractors try to take advantage like that!
There’s surely a construction schedule. When is the contractor supposed to be finished? What work is still outstanding?
Have any retainers already been withheld?
Be prepared for everything, but of course, try to have a conversation first. The construction schedule becomes void if the developer issues an additional claim that is simply not paid without comment.
Why do you think the lawyer advises reaching an agreement? He doesn’t make money otherwise...
PS:
At the moment, any delay can be justified with keywords like material shortages and labor shortages. The general contractor has been paid up to the current construction phase, so they don’t mind if construction halts.
Have you experienced this yourself or are you just giving wise advice from your finished home?
mayglow schrieb:
I believe there are a few posts here that were still during the project phase, where letters notifying price increases were sent. For example, here https://www.hausbau-forum.de/threads/preissteigerung-trotz-festpreis.43103/, but I don’t know how it ultimately turned out.
I also vaguely remember that @Pinkiponk experienced unexpected increases later in the project, but I’m currently having trouble finding a thread to check whether it was comparable or completely different. The confusing thread history of @Pinkiponk even overwhelms my 11ant-memory. But I recall that the delays were due to the client’s side.
kati1337 schrieb:
And even if the deadline started at the beginning of construction, I still find it a very one-sided contract clause. After all, only the contractor has control over the required time until completion. They could simply delay 1–2 weeks between each trade and then add a large surcharge on the former “fixed price” in month 14, right? Two times no. First, a fairly designed clause also includes agreeing on the steepness of the increase if the estimated duration is exceeded. And when it comes to obtaining permits, the general contractor (GC) differs from the main contractor (MC) in that it is the client’s responsibility with a GC, which is naturally outside the contractor’s influence.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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WilderSueden6 Oct 2022 20:59hauskauf1987 schrieb:
Legally speaking, the additional costs can only apply to the part that is built after the fixed price period expires, right?!It depends on what the contract states. Many contracts refer to the construction cost index, which then applies to everything. In this case, since nothing is agreed upon, the matter will likely end up in court until a clear decision is made.hauskauf1987 schrieb:
From a legal perspective, the additional cost can only apply to the part that is built after the fixed price period expires, right?WilderSueden schrieb:
Depends on what the contract states.See my explanation in post #49: a installment of the payment schedule is not the same as a phase of the service delivery that can be partially accepted or otherwise clearly defined and valued. The fact that the project is deliberately not divided into separate lots is part of the nature of construction with a general contractor (GC) and is typically an explicit requirement from the client side.https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
11ant schrieb:
Compare my explanation in post #49: a installment of the payment plan is not the same as a stage of work completion that can be partially accepted or otherwise clearly valued. The fact that the project is specifically not divided into separate lots is part of the nature of working with a main contractor (and is typically the explicit preference of the client). That’s what I meant in my earlier post. Just with less fancy wording. 😀
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fromthisplace6 Oct 2022 21:51xMisterDx schrieb:
The largest price increase by far occurred in 2021, you were already involved then. Is that a fact? What is the reason for it?