Hello dear forum members,
I have read a lot here but still havenât made much progress.
We have the following situation. In October 2020, we signed a contract to build a semi-detached house with a fixed price guarantee for 24 months. The associated company also helped us find a plot of land, which, according to their statement, would be developed shortly. However, that was not the caseâwe were a bit naive, but that canât be changed now.
The land development will be completed in October 2022.
We want to continue building and come to a reasonable agreement with the builder, but the financial burden due to increased interest rates and general inflation is obviously quite high.
Now a few questions:
Does the fixed price guarantee generally refer to the start of construction or to project completion?
Is it correct that price increases may only be passed on to us if they occur after the fixed price period expires?
The latter was assured to us in a conversation in 2021, which took place when it became clear that land development would take significantly longer than planned.
Meanwhile, the builder no longer feels bound to this statement since the situation has changed so much.
The company would like us to sign a new contract. Am I right in thinking that we should absolutely not do this because it would only bring disadvantages for us? We are already building with very basic specifications, but we have calcium silicate blocks instead of aerated concrete; this would be the only point where costs could still be saved. How should such a side agreement be designed so that the original contract is not suddenly affected? To give some numbers, a current calculation would be over 30% more expensive than in 2020. An increase of 10% would still be manageable; somewhere around 20% would be the limit beyond which the project would really become difficult for us.
Thank you very much for any advice and best regards
I have read a lot here but still havenât made much progress.
We have the following situation. In October 2020, we signed a contract to build a semi-detached house with a fixed price guarantee for 24 months. The associated company also helped us find a plot of land, which, according to their statement, would be developed shortly. However, that was not the caseâwe were a bit naive, but that canât be changed now.
The land development will be completed in October 2022.
We want to continue building and come to a reasonable agreement with the builder, but the financial burden due to increased interest rates and general inflation is obviously quite high.
Now a few questions:
Does the fixed price guarantee generally refer to the start of construction or to project completion?
Is it correct that price increases may only be passed on to us if they occur after the fixed price period expires?
The latter was assured to us in a conversation in 2021, which took place when it became clear that land development would take significantly longer than planned.
Meanwhile, the builder no longer feels bound to this statement since the situation has changed so much.
The company would like us to sign a new contract. Am I right in thinking that we should absolutely not do this because it would only bring disadvantages for us? We are already building with very basic specifications, but we have calcium silicate blocks instead of aerated concrete; this would be the only point where costs could still be saved. How should such a side agreement be designed so that the original contract is not suddenly affected? To give some numbers, a current calculation would be over 30% more expensive than in 2020. An increase of 10% would still be manageable; somewhere around 20% would be the limit beyond which the project would really become difficult for us.
Thank you very much for any advice and best regards
Even if the application is submitted today, you should expect a minimum of 3 months until the building permit / planning permission is granted. I donât think it will happen before your locked-in price expires, even though the situation is very unfortunate.
You should consult a lawyer to find out what options you have.
You should consult a lawyer to find out what options you have.
Sandro177 schrieb:
Architect meetings and so on have not taken place yet. Neither has the selection of materials. Why not?*
So, there is no detailed planning submitted yet? What was the offer based on?
You could have already submitted the building permit / planning permission application a long time ago. And why is the surveyor not allowed on YOUR property?
These are all matters that, normally (of course, I donât know your exact situation), can be handled as soon as you own the land (or in some casesâsurveysâeven before that)...
*Did you miss these steps, or has the construction company been delaying you? Iâm asking because there might be a way to extend the price lock period if the construction company is responsible for the delay...
S
Sandro17724 Jun 2022 15:31filosof schrieb:
Why not?*
So, there is no submission plan at all yet? On what basis was the offer created?
You could have applied for the building permit / planning permission a long time ago. And why is the surveyor not allowed on YOUR property? Good question. Because the site development has taken a year longer than we expected, the issue simply hasn't been as prominent as it otherwise would have been, and I assumed that we would have heard something from the builder in the meantime. Honestly, I didn't really expect anything before October 2022. The whole area is a new housing development, and the plots are not yet marked out. Good to know that these are not reasons for further delays. My main question remains: on what basis are price increases allowed if the contract doesnât specify anything on this? Does anyone have experience with this?
Thank you so far for the input.