ᐅ Advance payment for the window installment (or window payment)
Created on: 7 Jun 2023 16:54
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Bayernbors
Hello everyone
Our general contractor informed us that the window manufacturer is offering a discount and wants to pass it on to us. This discount only applies to orders confirmed and paid for before the end of this month.
We are still far from the stage of window installation (we are just starting).
What risks are associated with making an early payment for the windows before they are actually installed in our house? Are there any ways to mitigate these risks?
Thank you very much
Best regards
Our general contractor informed us that the window manufacturer is offering a discount and wants to pass it on to us. This discount only applies to orders confirmed and paid for before the end of this month.
We are still far from the stage of window installation (we are just starting).
What risks are associated with making an early payment for the windows before they are actually installed in our house? Are there any ways to mitigate these risks?
Thank you very much
Best regards
Bayernbors schrieb:
Our general contractor informed us that the window manufacturer is offering a discount and wants to pass it on to us. This discount only applies to orders confirmed and paid before the end of this month.
We are still far from the window installation phase (we’re just getting started). It is surprisingly unusual and somewhat concerning that a general contractor shares this type of information directly with a client. The insolvency risk has been mentioned repeatedly—are you seriously proceeding without a performance bond?
Bayernbors schrieb:
Should I ask the general contractor/window manufacturer to have their bank issue such a direct payment guarantee? https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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Bayernbors9 Jun 2023 20:4711ant schrieb:
Are you seriously building without a completion guarantee, given the circumstances?Unfortunately, this is the first time I have heard about this completion guarantee.
Is it a large general contractor (GC) or a smaller one? You referred to "she" a few times— is it a single woman or a larger company? And is it really a GC, or are you working with a construction company (turnkey?) on an existing plot of land? If you genuinely fear or consider it plausible that the company might go bankrupt, I wouldn’t make an advance payment. You would be transferring money to your construction company, not directly to the window manufacturer. If they declare insolvency shortly after, you would have neither the money nor the windows.
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Bayernbors10 Jun 2023 00:45kati1337 schrieb:
Is it a large general contractor (GC) or a small one? You mentioned "she" a few times—is it a single woman or a larger company? It is a small family business. The owner and main contact is the lady I am communicating with.
kati1337 schrieb:
And is it really a GC, or are you working with a construction company for a turnkey project on an existing plot? I believe in our case it is a GC. We purchased the plot ourselves and then hired her to build the house.
kati1337 schrieb:
If you really fear or consider it plausible that the company might go bankrupt, I wouldn’t make advance payments. No, not really. Nothing unusual that worries me. Every time I visit the construction site, I meet tradespeople and can see the progress.
It’s just the general risk any GC might face.
kati1337 schrieb:
You are transferring money to your construction company, not the window manufacturer. If they go bankrupt shortly after, you end up with neither money nor windows. That is indeed a bit confusing. I pay the GC, who then pays the window supplier.
If the window supplier becomes insolvent, wouldn’t the GC still be liable to me with their own funds?
If I request a direct payment guarantee (self-debtor bank guarantee), should the GC provide it to me or to the window supplier?
I would be less worried about Drutex going into insolvency. They are already quite large. Although, of course, today you should never say never.
I was more concerned about your family-owned general contractor. Of course, none of us can really judge here how financially stable they are. Maybe I’ve just watched one too many episodes of "construction disasters." But your general contractor probably also won’t pay for these windows before they are delivered (or is that explicitly stated in the contract terms?), so I wonder why your contractor wants the money upfront.
Roughly, what amount are we talking about? I think our installment invoice for windows (also Drutex) was over €40,000 (about $43,000).
I was more concerned about your family-owned general contractor. Of course, none of us can really judge here how financially stable they are. Maybe I’ve just watched one too many episodes of "construction disasters." But your general contractor probably also won’t pay for these windows before they are delivered (or is that explicitly stated in the contract terms?), so I wonder why your contractor wants the money upfront.
Roughly, what amount are we talking about? I think our installment invoice for windows (also Drutex) was over €40,000 (about $43,000).
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HoisleBauer2210 Jun 2023 11:36Please note § 632a of the Building Code "Progress Payments" and § 650m of the Building Code "Progress Payments; Securing the Claim for Compensation," meaning that a maximum of 90% of the requested payment should be made. What was agreed in the construction contract? It should probably state "payment based on construction progress," right? Your general contractor is liable for what has been contractually guaranteed in the scope of work or the construction contract (fixed price? price adjustment clauses or similar?).