Hello everyone,
we are considering changing the general contractor. The bank has already approved this. My question is, what might be disadvantages of switching? Where could potential pitfalls lie? I’m simply hoping for your experiences so we don’t overlook anything important...
Background:
We signed the contract with the general contractor in August ’16, and in December received the completed applications for the building permit, which was granted in January ’17. We informed the contractor in December ’16 that we wanted to start as soon as the weather allowed at the beginning of ’17, which they confirmed. There is no contractually fixed deadline since, due to the planned owner-occupied work (electrical, garage, and floor work on the upper floor), the contractor did not want to commit to a schedule. Since then, communication with our contractor has not been satisfactory:
Our site manager was reportedly only informed at the end of January that he was to oversee our build and has appeared unprepared at every conversation so far. (For example, in every meeting, he has asked whether we were doing any owner-occupied work or not.) He overlooks small traps I include in our correspondence.
When some of our neighbors started in the second calendar week of February, we were still chasing our site manager to find out when work would finally begin. He tried to reassure us by saying he first needed to find a construction company. I replied that this should have been done back in December, when it was already clear that the building permit would be issued in winter (the typical processing time in our area is four weeks, which was also the case here).
It dragged on until mid-March before a construction company was even found (after, reportedly, another company unexpectedly withdrew a week before the planned start date). This company then took a total of three weeks to complete the foundation slab (on a flat, shallowly excavated lot without a basement). For our neighbors, this process mostly took less than a week. “Our” workers averaged two days per week on-site, while others had workers present daily.
Since then, there has been radio silence from the construction company. I have not been able to reach the foreman for over two weeks. He does not answer calls, voicemails, or emails. Our contractor’s site manager keeps promising at short intervals that work will continue—of course, without it actually happening. Several of our neighbors, for example, are receiving their floor slabs this week….
Therefore, we have now started talks with our bank and other companies who could take over the construction for us. I have already informed our current contractor and asked him to consider a contract termination. (So far, we have paid the contractor 2% for architect services and 10% for the “foundation slab” construction phase. A penalty for contract termination would be 10% of the contract sum, although I do not consider this justified given the significant construction delays.)
we are considering changing the general contractor. The bank has already approved this. My question is, what might be disadvantages of switching? Where could potential pitfalls lie? I’m simply hoping for your experiences so we don’t overlook anything important...
Background:
We signed the contract with the general contractor in August ’16, and in December received the completed applications for the building permit, which was granted in January ’17. We informed the contractor in December ’16 that we wanted to start as soon as the weather allowed at the beginning of ’17, which they confirmed. There is no contractually fixed deadline since, due to the planned owner-occupied work (electrical, garage, and floor work on the upper floor), the contractor did not want to commit to a schedule. Since then, communication with our contractor has not been satisfactory:
Our site manager was reportedly only informed at the end of January that he was to oversee our build and has appeared unprepared at every conversation so far. (For example, in every meeting, he has asked whether we were doing any owner-occupied work or not.) He overlooks small traps I include in our correspondence.
When some of our neighbors started in the second calendar week of February, we were still chasing our site manager to find out when work would finally begin. He tried to reassure us by saying he first needed to find a construction company. I replied that this should have been done back in December, when it was already clear that the building permit would be issued in winter (the typical processing time in our area is four weeks, which was also the case here).
It dragged on until mid-March before a construction company was even found (after, reportedly, another company unexpectedly withdrew a week before the planned start date). This company then took a total of three weeks to complete the foundation slab (on a flat, shallowly excavated lot without a basement). For our neighbors, this process mostly took less than a week. “Our” workers averaged two days per week on-site, while others had workers present daily.
Since then, there has been radio silence from the construction company. I have not been able to reach the foreman for over two weeks. He does not answer calls, voicemails, or emails. Our contractor’s site manager keeps promising at short intervals that work will continue—of course, without it actually happening. Several of our neighbors, for example, are receiving their floor slabs this week….
Therefore, we have now started talks with our bank and other companies who could take over the construction for us. I have already informed our current contractor and asked him to consider a contract termination. (So far, we have paid the contractor 2% for architect services and 10% for the “foundation slab” construction phase. A penalty for contract termination would be 10% of the contract sum, although I do not consider this justified given the significant construction delays.)
Grym schrieb:
By now I know we are all enthusiasts here, discussing all sorts of tiny details. But if the original poster wants to call the company a developer, then it’s a developer. Even if it is a general contractor. Only 0.05% of those involved in construction make this distinction; for the other 99.95%, it’s a developer.Exactly. 90% of all cardinals can’t pronounce the word "diocese" correctly – yet Easter and Christmas have never fallen on the same day.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
C
Caspar202027 Apr 2017 07:20Grym schrieb:
Only 0.05% of those involved in construction make this distinction; for the other 99.95%, it’s a developerYou can’t use such an argument in court. And it will also make a significant difference in the client’s budget depending on the type of contractual relationship.
As @ypg already said, it’s important to know who the client is.
Moreover, in this case (assuming it’s not a genuine developer), it will be crucial whether it’s a general contractor (GC) or a construction manager (CM). With a GC, I still have my architect with the plans.
And with a CM? In the worst case, not even all the plans.
I believe that beyond all the exact definitions of terms, the main point was clear. The client is working with a solid, full-service house builder. However, progress is stalled; it seems they haven’t even found subcontractors yet, and the builder doesn’t have craftsmen on staff, or at least not for all trades. Naturally, the client is frustrated and wants to terminate the contract. For that, one needs to understand what documentation and permits are available to continue with another builder. Plans? I would have everything required for the building permit, as well as a detailed masonry plan with dimensions, structural engineering documents, roofing construction plans, and energy performance calculations, plus a soil report. Does the current builder have these as well?
Next question: Is it possible to exit the contract without significant penalties? And can I quickly find another builder who can take over, complete the project, and won’t be considerably more expensive?
I understand the anger about a stalled construction site, but it’s always wise to sleep on it once and carefully weigh all options.
Karsten
Next question: Is it possible to exit the contract without significant penalties? And can I quickly find another builder who can take over, complete the project, and won’t be considerably more expensive?
I understand the anger about a stalled construction site, but it’s always wise to sleep on it once and carefully weigh all options.
Karsten
Hello everyone, and thank you very much for your responses – I am currently on a business trip and didn’t have my forum login details at hand, hence my late reply.
Regarding the exact contract details, I can provide more information over the weekend. However, as Nordlys mentioned, we have purchased a plot and are building with the company whose name I prefer not to disclose here yet, to avoid wrongly accusing anyone. This company does not have its own craftsmen but hires construction companies to carry out the build. They employ an architect who created and commissioned the house plans and the structural engineering. We have already paid and received these with a discount of 2.38% on the total price.
- Despite my request, no soil survey report was prepared; instead, we were basically told that the construction company would get in touch if there were any problems, which we found very unsatisfactory.
- Furthermore, we were pressured to skip an expensive height point measurement and use a reference point above the construction access road for elevation instead, which seemed very odd since this was originally offered as a free included service.
- The free final cleaning of the construction site was only offered if we agreed to a house inspection, although it was advertised as an included service.
- Even though the foundation slab is already in place, I have not yet received the promised schedule from the site manager, despite having requested it well in advance.
- He usually appears unprepared at meetings but regularly reassures us by saying that he is doing his job and will take care of everything.
- For example, he keeps asking if we plan to contribute any personal work, which we confirm every time since we are doing the electrical installations ourselves. We have asked him repeatedly when exactly we will be involved.
- We were also promised that applications for water and similar services would be handled by the company. In the last meeting, however, he was unaware of this, despite having previously noted it down and having received the contract from us.
- At the last meeting, he also reminded us that he still needed a plan for the kitchen, although we sent it to him a month earlier.
We have a clarifying meeting scheduled for next week. At this point, we are inclined to request a change of site manager because he has demonstrably lied to us (he repeatedly claimed that workers would arrive the next day, although the construction company was on a company-wide holiday, which he was informed about). We have already been offered an amicable settlement due to the delays and unfulfilled services.
As I mentioned at the beginning, we have not yet decided to change the general contractor but the idea is on our minds. We welcome input from anyone who may have gone through a similar experience or can offer advice. If we do take this step, hiring a lawyer will be our only option since neither of us is knowledgeable in legal matters, and we have no lawyers among our relatives.
I am aware that I would have to pay the contractually stipulated 10% penalty if the contractor resists, but I would try to argue for a significant reduction of this amount based on the delays, the unfulfilled services, the already high partial payment, and to preserve the company’s good reputation... which it certainly had before we signed the contract.
Thanks again for your responses. I will be able to provide deeper insights into the contract over the weekend at the latest.
Regarding the exact contract details, I can provide more information over the weekend. However, as Nordlys mentioned, we have purchased a plot and are building with the company whose name I prefer not to disclose here yet, to avoid wrongly accusing anyone. This company does not have its own craftsmen but hires construction companies to carry out the build. They employ an architect who created and commissioned the house plans and the structural engineering. We have already paid and received these with a discount of 2.38% on the total price.
- Despite my request, no soil survey report was prepared; instead, we were basically told that the construction company would get in touch if there were any problems, which we found very unsatisfactory.
- Furthermore, we were pressured to skip an expensive height point measurement and use a reference point above the construction access road for elevation instead, which seemed very odd since this was originally offered as a free included service.
- The free final cleaning of the construction site was only offered if we agreed to a house inspection, although it was advertised as an included service.
- Even though the foundation slab is already in place, I have not yet received the promised schedule from the site manager, despite having requested it well in advance.
- He usually appears unprepared at meetings but regularly reassures us by saying that he is doing his job and will take care of everything.
- For example, he keeps asking if we plan to contribute any personal work, which we confirm every time since we are doing the electrical installations ourselves. We have asked him repeatedly when exactly we will be involved.
- We were also promised that applications for water and similar services would be handled by the company. In the last meeting, however, he was unaware of this, despite having previously noted it down and having received the contract from us.
- At the last meeting, he also reminded us that he still needed a plan for the kitchen, although we sent it to him a month earlier.
We have a clarifying meeting scheduled for next week. At this point, we are inclined to request a change of site manager because he has demonstrably lied to us (he repeatedly claimed that workers would arrive the next day, although the construction company was on a company-wide holiday, which he was informed about). We have already been offered an amicable settlement due to the delays and unfulfilled services.
As I mentioned at the beginning, we have not yet decided to change the general contractor but the idea is on our minds. We welcome input from anyone who may have gone through a similar experience or can offer advice. If we do take this step, hiring a lawyer will be our only option since neither of us is knowledgeable in legal matters, and we have no lawyers among our relatives.
I am aware that I would have to pay the contractually stipulated 10% penalty if the contractor resists, but I would try to argue for a significant reduction of this amount based on the delays, the unfulfilled services, the already high partial payment, and to preserve the company’s good reputation... which it certainly had before we signed the contract.
Thanks again for your responses. I will be able to provide deeper insights into the contract over the weekend at the latest.
Sorry, I had hoped to make this clear:
The land belongs to us. We bought it from the local municipality. The construction company is supposed to deliver a turnkey house, while we will handle (or arrange) the electrical work, garage, and flooring ourselves.
We have purchased a plot of land and are building with a company whose name I do not want to mention here (yet),
The land belongs to us. We bought it from the local municipality. The construction company is supposed to deliver a turnkey house, while we will handle (or arrange) the electrical work, garage, and flooring ourselves.
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