ᐅ Is a Completion Guarantee Necessary for Finishing Construction?

Created on: 9 Aug 2018 23:36

Hello,
we are starting construction next week. It is a small to medium-sized local contractor.

Now I am wondering if I should have some kind of completion guarantee? (Large home builders often advertise this.)

Or is that unnecessary?
I have full trust in the company, and payments will be made based on construction progress.

I am only familiar with this from my father’s house build. He built with an independent architect five years ago and received a guarantee from the trades ensuring the five-year warranty was definitely secured.

Thanks for your clarification.

Knallkörper10 Aug 2018 11:19

The retention must be "reasonable." For example, 200% of the defect rectification costs is considered reasonable. So, it has little to do with the total construction costs.

If your roof is a complete botch, you naturally withhold the entire progress payment for the roof. At least.

A guarantee is not unusual. Many, including myself, have a warranty bond. In my case, the amount is 10%. However, I don’t know anyone who has a completion bond. This can be better secured through the payment schedule.

Müllerin10 Aug 2018 13:53

I will quote from the notarized contract:

"The buyer is entitled, according to §632a III of the Building Code, to withhold a one-time amount of 5% of the purchase price upon the first installment to ensure the timely completion of the work without significant defects."

ᐅ Is a Completion Guarantee Necessary for Finishing Construction?

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