ᐅ Half shell construction

Hello everyone,

We had a consultation with a construction company that builds the shell of the house themselves and contracts out additional services for the turnkey construction to third parties.

The company offers everything from submitting the building permit / planning permission, architectural services, structural engineering, tendering and awarding contracts, as well as construction supervision.

This is nothing unusual so far.

The difference from a "general contractor" is that this company does not want to act as the contracting party to the third parties. Instead, a separate contract is made between the homeowner and each subcontractor for every trade and company.

The advantage of this approach is that each trade’s warranty is covered by a different company. In other words, if one company goes bankrupt, only part of the warranty would be affected.

Since I have not heard of this before, I’d like to ask a few questions here. :o

Is this approach known to anyone?
What are the pros and cons from your perspective?
Has anyone built a house this way?

Are you building with a fixed price? What happens if the third company changes their prices because, for example, the tender was not accurate? This is what comes to mind immediately. Your builder is then off the hook (this also applies to defect repairs).

If you choose such an arrangement, you might as well build “properly” with an architect and individual trade contracts.

Hello,

PeterLustig49 schrieb:
...we had a consultation with a construction company that builds the shell structure themselves and outsources further services for the turnkey construction to third parties...

From an economic perspective, this approach is quite close to a successful future model! There must be reasons why the general contractor transfers liability for the final building to third parties in this case! ;-)

PeterLustig49 schrieb:
...The construction company offers, from submitting the building permit / planning permission application, architectural services, structural engineering, ...

I would consider that valuable if, for example, in addition to the closed shell structure, plaster and screed are included at a fixed price. However, I would not leave the tendering, remaining contracting, or construction management to them! ;-)
A construction project cannot be realized without internal construction management, so internal management should under no circumstances be used as a marketing argument. What is important is external, independent construction supervision that monitors the contractor closely! Only positive appraisals from this supervision should justify partial payments! ;-)

PeterLustig49 schrieb:
...This would have the advantage that for each trade a different company assumes the warranty. That means if one company goes bankrupt, only part of the warranty is "lost".

Advantages always come with certain limitations.
The “jack of all trades” is well known not to exist!
This may not be the most convenient solution, but it is certainly very economical and avoids unpleasant surprises!

Best regards

nordanney schrieb:
...What if every third company changes their prices, ...

For a new build, a contractor hardly faces any risk of providing missing services also at the fixed price! If not, they are in the wrong place!

nordanney schrieb:
...If you choose such a setup, you might as well build "properly" with an architect and individual trade contracts.

That is incorrect; there is no "fixed price guarantee covering everything" here!!!
That is exactly why this intermediate solution is so interesting!

Best regards

€uro schrieb:
For a new build, the contractor (AN) hardly faces any risk in providing missing services also at a fixed price! If not, they are out of place!
Misconception: there is no "fixed-price guarantee covering everything" here!!!
That’s exactly why this interim solution is so interesting!

Best regards.

I believe it still won’t be that simple.
Contract customer – builder: fixed price
Contract customer – subcontractors: ???
What happens if the subcontractor agreements don’t match the fixed-price contract? Who is the contact person for complaints? Site management (as you already mentioned)? Who pays the subcontractors?

Hello,

PeterLustig49 schrieb:

The difference compared to a “normal” general contractor (GC) is that this construction company does not want to act as the contractual partner for the subcontractors. Instead, a separate contract is made from the client to each trade and company.

Contrary to €uro’s opinion, I consider this very problematic. Normally, you would sign the contract through the main contractor with one subcontractor, who usually handles all trades or coordinates with various tradespeople. This setup—first contracting with the shell construction company and then awarding all the remaining trades individually (which are quite a few)—requires extensive understanding of house building itself. Read the posts by “nordanney” on the HBF—he awards contracts individually via an architect, and even that takes an enormous amount of effort.

PeterLustig49 schrieb:

The advantage is that each trade’s company carries its own warranty. That means if one company goes bankrupt, only part of the warranty is “lost.”

Nice marketing statement! But what if the bids for the subsequent trades are so low that, in the worst case, you have no chance of finding another company to take over the “failed” trade? The shell builder is off the hook, since this is the most expensive trade and their profits are secured 😉

Now all that’s missing is for you to say the shell builder will tender the trades in “one pool of tradespeople” ....

If you are truly interested in this system, have the expertise and time, find an architect and manage the house construction together with them. It goes without saying that external construction supervision and negotiations of securities should also be included.

Best regards, Bauexperte