ᐅ Delays in Home Construction – Calculations for Compensation Claims
Created on: 22 Nov 2023 10:02
T
ThomasH.Hello everyone,
We are currently having our house built through a general contractor. Contractually, a construction deadline guarantee was agreed upon, assuring that completion would take place on November 3, 2023.
Of course, we are now behind schedule; the screed has only just been installed. About eight weeks ago, I formally notified them that we are experiencing a construction delay and that I will assert claims for damages accordingly.
Now my question is: what can I claim as damages?
+ Full compensation for interest on loan commitments?
+ Additional costs for the kitchen, since the price guarantee (2 years) has expired and according to the original construction schedule the measurements should have been taken long ago?
+ We do not rent, we live in our own property, but will move into the new property. Could there be a claim for hypothetical lost rental income from our current property?
+ Penalty interest for delay, because I can only begin repaying the loan later, shortening the remaining repayment period?
Do you have other points or experiences on how I can calculate this? How does it usually work in practice with such claims? Are there any court rulings about what can be claimed?
Many thanks for your help.
Best regards,
Thomas
We are currently having our house built through a general contractor. Contractually, a construction deadline guarantee was agreed upon, assuring that completion would take place on November 3, 2023.
Of course, we are now behind schedule; the screed has only just been installed. About eight weeks ago, I formally notified them that we are experiencing a construction delay and that I will assert claims for damages accordingly.
Now my question is: what can I claim as damages?
+ Full compensation for interest on loan commitments?
+ Additional costs for the kitchen, since the price guarantee (2 years) has expired and according to the original construction schedule the measurements should have been taken long ago?
+ We do not rent, we live in our own property, but will move into the new property. Could there be a claim for hypothetical lost rental income from our current property?
+ Penalty interest for delay, because I can only begin repaying the loan later, shortening the remaining repayment period?
Do you have other points or experiences on how I can calculate this? How does it usually work in practice with such claims? Are there any court rulings about what can be claimed?
Many thanks for your help.
Best regards,
Thomas
G
Gerddieter22 Nov 2023 10:35I don’t understand why a warning is sent immediately without even talking to each other first.
After a letter like that, things don’t just get better...
GD
After a letter like that, things don’t just get better...
GD
K
KarstenausNRW22 Nov 2023 12:58Nida35a schrieb:
You can demand exactly what is stated in the house contract, e.g. €100 per day/week/year.
If nothing is specified, it becomes difficult and will involve a lawyer. First of all, what you wrote is nonsense. Compensation for damages can either be directly specified in the contract or, if not, is determined according to the Building Code and relevant case law. There are clear regulations. It is not difficult, but having a lawyer is definitely very helpful.
@TE: Is November 3rd contractually fixed? Otherwise, a delay only occurs after a reminder under §286 of the Building Code.
Can objections be raised that might affect the completion date? What are the contract terms regarding this? Often there are clauses about this.
§280 of the Building Code clearly states that all damages must be compensated, including financial losses. You have to specify these damages yourself; there is no standard list. Each case is individual, but the Supreme Court has ruled on this extensively.
Potential examples include:
- Additional bank interest charges (e.g. higher commitment fees rather than actual loan interest on the delayed disbursed remaining loan amount)
- Your lawyer fees
- Loss of rental income due to delayed move-out
- Rental of temporary accommodation
- Costs for furniture storage
- Cost increases due to expired fixed price agreements for new home furnishings
and so on.
Regarding your mentioned default interest, this generally does not exist with construction financing. You only pay commitment fees and/or interest on the loan. A shortening of the repayment period by 1–2 months will not cause financial loss for you.
K
k-man202122 Nov 2023 13:17ThomasH. schrieb:
And of course, about 8 weeks ago I already gave formal notice that we are behind schedule and that I would be making claims for damages.Did you not receive any response? Review all points that could potentially be used against you, such as additional requests that caused delays, late approvals, etc. The general contractor will not pay voluntarily, and legal proceedings can drag on indefinitely, even if the situation is clear. So yes, get a lawyer, but based on my experience (almost 10 years of legal disputes over construction defects and an uncooperative contractor), I would always try to find a solution together.
I would like to point out that the construction price index increased by about 23% in 2022 compared to the previous year.
If you have a fixed-price construction contract and it has not been changed so far, I would be cautious about making claims due to delays. The general contractor could also pass on some of their increased costs to you within certain limits. This could turn out to be a significant financial loss for you.
If you have a fixed-price construction contract and it has not been changed so far, I would be cautious about making claims due to delays. The general contractor could also pass on some of their increased costs to you within certain limits. This could turn out to be a significant financial loss for you.