Hello everyone,
In September 2020, we signed a fixed-price contract (with a 12-month fixed price guarantee) with a major general contractor, as they offered us a "land search service." Unfortunately, to this day, the contractor has not presented us with any plots of land on which we could build. In January 2021, we found a plot ourselves and recently met again with our contractor to finalize our building project. The seller has now informed us that there was a price increase of about 4.5% in December 2020. The next price increase is scheduled for June 2021 and is expected to be around 3.4%. Of course, we want to build at the price that was offered to us in September 2020. We understand that construction costs are at a very high level and that price increases are justified to some extent.
My question is whether the seller was obligated to inform us about the price increase in December 2020. Does this make the signed contract void? His advice was to quickly sign a new contract with another 12-month fixed price guarantee to avoid the price increase in June 2021, since we will not be able to start construction by September 2021 (because the plot is in a new development area and has not yet been connected to infrastructure).
We now feel somewhat pressured, as we are concerned that interest rates might rise further and that the house costs will increase significantly.
Thank you in advance for your comments.
In September 2020, we signed a fixed-price contract (with a 12-month fixed price guarantee) with a major general contractor, as they offered us a "land search service." Unfortunately, to this day, the contractor has not presented us with any plots of land on which we could build. In January 2021, we found a plot ourselves and recently met again with our contractor to finalize our building project. The seller has now informed us that there was a price increase of about 4.5% in December 2020. The next price increase is scheduled for June 2021 and is expected to be around 3.4%. Of course, we want to build at the price that was offered to us in September 2020. We understand that construction costs are at a very high level and that price increases are justified to some extent.
My question is whether the seller was obligated to inform us about the price increase in December 2020. Does this make the signed contract void? His advice was to quickly sign a new contract with another 12-month fixed price guarantee to avoid the price increase in June 2021, since we will not be able to start construction by September 2021 (because the plot is in a new development area and has not yet been connected to infrastructure).
We now feel somewhat pressured, as we are concerned that interest rates might rise further and that the house costs will increase significantly.
Thank you in advance for your comments.
ArtemR90 schrieb:
since we won’t manage to start construction by 09/2021To keep the old price, you would not only have had to start by then but actually be finished! Either way, the price increase affects you. It’s either the old contract with adjusted prices from 09/2021 or a new contract with completely different terms. It might make sense to check if you can terminate the contract since they didn’t find a plot for you; however, this is usually not the case, and you have probably already informed the general contractor about your self-found plot. No matter how you look at it, you won’t get the house at the old price.
Land surveying services have often been discussed here in the forum. They are beneficial for the general contractor but less so for the homeowner.
Don’t let yourself be pressured and check if you can separate from the general contractor. If you sign now, due to site development and the current building material shortages, you likely won’t finish your house construction even within 12 months.
Don’t let yourself be pressured and check if you can separate from the general contractor. If you sign now, due to site development and the current building material shortages, you likely won’t finish your house construction even within 12 months.
Thank you very much for your information. Are such price increases insignificant? Can we withdraw from the contract due to price increases if we have documented in writing since when the prices have changed and can prove that starting construction before 09/2021 is not realistic? Has anyone had similar experiences?