ᐅ Advance payment for the window installment (or window payment)

Bayernbors schrieb:

This is actually a bit confusing. I pay the money to the general contractor, who then pays the window supplier.
If the window supplier goes bankrupt, the general contractor should still be liable to me with their own money, right?
If I apply for this direct bank guarantee, should the general contractor provide it to me or to the window supplier?

Secondly, you still don’t understand: the completion guarantee is not meant as protection for any third party—definitely not for a subcontractor or any other auxiliary party of your contractor—but for you, to ensure that the house is completed if the contractor is no longer able to do so. And first of all, forget any ideas that you could negotiate this guarantee retroactively. Insolvency law is heavily stacked against the individual, but you won’t be able to undo this risk now.

Bayernbors schrieb:

It is a small family business. The owner and contact person is the lady I talk to.

There are, very rarely, female owners of construction companies—usually daughters of the founder, whose father started the company. These businesses are regularly quite solid, so there is little reason for concern. Much more common—especially where concerns arise—is that a gentleman who has gone bankrupt multiple times uses his secretary or partner as a figurehead.

It is inherent to a general contractor contract that it acts like a kind of “hidden adoption,” where you often don’t even know the actual service providers, subcontractors, or auxiliary parties involved—and in any case, these parties and you have legally no direct relationship whatsoever, meaning no direct claims or obligations between you and them.

Payment schedules are typically and appropriately designed to pay the contractor for work and deliveries already provided (even if not yet officially accepted) and to keep them liquid for advance payments to subcontractors or suppliers for upcoming steps. In this context, the suggestion “give me the money now for an item of a future phase beyond the next one” is usually an indication of liquidity problems on the general contractor’s side. A general contractor usually keeps the exact supplier open until shortly before placing the order—precisely to take advantage of better purchasing opportunities. Passing such purchasing benefits on to clients is highly unusual.

As a former window manufacturer (aluminum) and later dealer (also PVC), I can tell you that special price promotions between manufacturer and reseller are typically irregular but usually occur about three times a year. The main reasons are stock clearance and company holidays, but also upcoming product improvements. Occasionally, windows are included in such promotions when the front door panel collection is changed. Except for product improvements—discontinued models should always be communicated honestly by dealers—I would never have passed such a purchasing advantage on to a first-time customer (which you are as a homeowner) and certainly not in full.

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Advance payments or overpayments are essentially the cause of financial worries for homeowners when the general contractor or another major trade makes mistakes or goes bankrupt. Entire TV shows are based on this fundamental mistake.

guckuck2 schrieb:

Cardinal mistake

That homeowners have fears about their livelihood is a "cardinal mistake"? I don’t understand. Could you please explain this in more detail?
By the way, I had a similar issue with an electrician who wanted the full payment for the upgrade options I chose (almost 10,000) immediately after the rough-in phase. Not everyone has such an amount readily available in their checking account. That can certainly cause some serious stress...

I kicked out the door specialist from my general contractor when he wanted all the extra charges paid upfront immediately (the delivery would likely have been about 9 months later at that time). It was only about 1,500 EUR, which I could have afforded, but I didn’t want to support that kind of business practice.
I then ordered all the doors online and installed them with my father-in-law. In total, I even saved 900 EUR (including a credit from the general contractor).

HoisleBauer22 schrieb:

That home builders have existential fears—is that a "cardinal mistake"? I don’t understand. Can you explain that in more detail?
By the way, I had a similar problem with an electrician who wanted the full amount for my chosen upgrade options (almost $10,000) right after the rough installation. That’s not necessarily an amount everyone has in their checking account. That can really stress you out...

The cardinal mistake isn't having existential fears, but making such advance payments in the first place.
I once mentioned shoddy workmanship in construction as a TV show format. I was already tearing my hair out several times when clients (I hope that was just scripted) claimed they had already paid the full price for their house, while only a botched shell was standing.

In the original poster’s case, it’s just difficult to assess.
I also have a small general contractor, and they would be the type to pass costs on to us like that. For example, we have tiles up to price X in the contract. When selecting tiles, it’s still possible to pick expensive ones without extra cost if others are cheaper in return. They basically offset the price of more expensive tiles with cheaper ones below amount X. They don’t have to do that, but they do.

But there’s also the other type of general contractor—the one who sets up a shell company for a bankrupt builder as the fifth firm.
And from a distance, we can’t judge into which category that company falls.

HoisleBauer22 schrieb:

Is it a "cardinal mistake" that homeowners have existential fears? I don’t understand. Could you explain that in more detail?
By the way, I had a similar problem with an electrician who wanted the full payment right after the rough-in stage for the upgrade options I had chosen (almost 10,000 euros). Such an amount isn’t necessarily available in everyone’s checking account. That can really make you panic…

I explained that in more detail. But you have to read the full sentence.