ᐅ General contractor requests price increase for the entire house
Created on: 6 Oct 2022 15:33
M
MSHausbau
Hello everyone,
I’ve read a lot and hope to get some advice...
We are building a house and are about 90% finished. The fixed price agreement expires at the end of October, and the contract doesn’t specify what happens afterward.
Now our general contractor is asking for €50,000.
His reasoning: As of today, the house is 18.66% more expensive, which is €51,250, so he is demanding €50,000 from us.
He already indicated over the phone that it probably won’t be the full 50K, but the 10K we offered was too low.
Now the question is, are we completely mistaken? I don’t see why we should pay extra for the entire house, only for the items that are still outstanding. That would be about €8,000 if you really apply the 18%.
Do you understand what I mean?
Does anyone have legal experience or some tips on how to argue this?
Our lawyer advises settling in the range of €15,000 to €20,000.
I’ve read a lot and hope to get some advice...
We are building a house and are about 90% finished. The fixed price agreement expires at the end of October, and the contract doesn’t specify what happens afterward.
Now our general contractor is asking for €50,000.
His reasoning: As of today, the house is 18.66% more expensive, which is €51,250, so he is demanding €50,000 from us.
He already indicated over the phone that it probably won’t be the full 50K, but the 10K we offered was too low.
Now the question is, are we completely mistaken? I don’t see why we should pay extra for the entire house, only for the items that are still outstanding. That would be about €8,000 if you really apply the 18%.
Do you understand what I mean?
Does anyone have legal experience or some tips on how to argue this?
Our lawyer advises settling in the range of €15,000 to €20,000.
X
xMisterDx6 Oct 2022 18:36K a t j a schrieb:
I also interpret it as meaning that the expiration of the fixed-price agreement for services already rendered no longer matters. Otherwise, there would be no point in having a fixed-price agreement at all. However, I’m not a lawyer and I find the expert’s statement quite surprising. The expert probably knows how a dispute with the general contractor (GC) can escalate and what happens on site while the parties are fighting through lawyers:
Nothing. And since the GC is not entirely at fault here, you would likely have to cover at least part of the legal fees.
A lawyer’s services don’t come cheap once they really get involved.
PS:
And the lawyer has probably read the entire contract and the GC’s terms and conditions, unlike the few snippets we know… right?
M
MSHausbau6 Oct 2022 18:57K a t j a schrieb:
I also understand it to mean that the expiration of the fixed price period for services already rendered no longer matters. Otherwise, there wouldn’t be any need for a fixed price agreement at all. However, I am not a lawyer and I find the expert’s statement quite surprising. That’s how I understand it as well. If you then apply the 18% increase to the outstanding items, you end up with around 6,000 to 8,000 (currency). I was already generous and told him 10,000 (currency).
M
MSHausbau6 Oct 2022 19:02mayglow schrieb:
I also suspect that they might assess the situation as a legal dispute being more expensive and therefore consider reaching an agreement more sensible. But that’s just a guess.
I believe there are a few posts here from earlier in the project when increase letters were delivered. For example, here https://www.hausbau-forum.de/threads/preissteigerung-trotz-festpreis.43103/ but I don’t know how that ultimately turned out.
I also remember that @Pinkiponk had unexpected increases later in the project, but I’m currently having trouble finding a thread to see if that was comparable or not at all. Yes, a legal dispute would probably be expensive, and the house might not get finished.
I think I’ve read everything on this topic here and didn’t really find anything helpful.
Regarding pinkiponk, I believe too much was paid. But that’s a different story. It’s already settled.
I’ll call the boss again tomorrow and explain everything thoroughly. Let’s see what he agrees to.
I’ll keep you updated on how it goes.
Many thanks to you all already 🙂
F
fromthisplace6 Oct 2022 19:19I consider your last two posts to be exactly right.
W
WilderSueden6 Oct 2022 19:36MSHausbau schrieb:
I know… hindsight is always 20/20. But that’s not really the issue here. What concerns me is the additional charge, which I think is simply excessive. The project manager himself wrote in an email that the entire house costs 51,000 more. But we’re almost finished and now have to pay the increase for the whole house? I think that’s wrong… what do you all think?It’s not necessarily about whether you’re wiser afterwards. Consumer protection assumes that in certain situations, the consumer is not fully capable of making informed decisions and therefore needs to be protected from themselves. I find this price locking so narrowly defined that it basically leaves customers open to being caught off guard. Even under favorable circumstances, you basically have no leeway for delays.H
hauskauf19876 Oct 2022 19:41I find your lawyer’s statement very disappointing.
50k more for what? On what basis? Have everything disclosed, original cost calculation, old purchase prices, new purchase prices.
Legally, the additional cost can only apply to the part of the construction done after the fixed-price period expires, right?
So, as you write, at most 18.66% of the construction costs.
Don’t let yourself be pressured, the builders just want to protect their profit margin.
50k more for what? On what basis? Have everything disclosed, original cost calculation, old purchase prices, new purchase prices.
Legally, the additional cost can only apply to the part of the construction done after the fixed-price period expires, right?
So, as you write, at most 18.66% of the construction costs.
Don’t let yourself be pressured, the builders just want to protect their profit margin.