Hello Forum,
I am new here and not entirely sure if this is the right section of the forum for my question. I apologize in advance if I have posted in the wrong place.
We are currently deeply involved in planning the construction of a single-family house. After some online research, however, I came across some rather negative points.
The house design is being handled by a planning company. The managing director of this company had an insolvency with his former construction business in 2010 (the reason for the insolvency was, in summary, the financial crisis—at least according to the managing director’s statement).
The construction phase will then be managed by a developer. This developer company was newly registered in the commercial register in early February and is owned by the brother of the managing director mentioned above. The brother is a master bricklayer and business economist and runs another construction company, which, however, does not have much information available online.
All in all, this gives a rather negative impression. Since our family will be growing in the next few weeks and our current apartment will soon be too small, we are willing to consider every possible option (unfortunately, the real estate market here offers very little flexibility).
How would you assess the entire project? Does it make sense to seriously pursue the construction, or would it be better to stay away? A credit check on the developer seems rather pointless, as the company was only registered about a month ago.
I hope for some opinions, rough assessments, and perhaps suggestions on how to proceed.
Best regards
I am new here and not entirely sure if this is the right section of the forum for my question. I apologize in advance if I have posted in the wrong place.
We are currently deeply involved in planning the construction of a single-family house. After some online research, however, I came across some rather negative points.
The house design is being handled by a planning company. The managing director of this company had an insolvency with his former construction business in 2010 (the reason for the insolvency was, in summary, the financial crisis—at least according to the managing director’s statement).
The construction phase will then be managed by a developer. This developer company was newly registered in the commercial register in early February and is owned by the brother of the managing director mentioned above. The brother is a master bricklayer and business economist and runs another construction company, which, however, does not have much information available online.
All in all, this gives a rather negative impression. Since our family will be growing in the next few weeks and our current apartment will soon be too small, we are willing to consider every possible option (unfortunately, the real estate market here offers very little flexibility).
How would you assess the entire project? Does it make sense to seriously pursue the construction, or would it be better to stay away? A credit check on the developer seems rather pointless, as the company was only registered about a month ago.
I hope for some opinions, rough assessments, and perhaps suggestions on how to proceed.
Best regards
Seridan schrieb:
Correct, basically. However, in this case, he would have no problem selling the land first and then starting the construction. No, not really. This is probably—alongside the common misconception that "builder" is the correct term for a general contractor—one of the main reasons why many future homeowners find it difficult to distinguish these terms: a developer sells a developed plot of land—even if the sale takes place before construction begins; and even if the buyer feels like the “builder” by agreeing to their planning preferences.
You do *not* automatically become the actual builder just because you sign the land purchase contract before construction starts. You only become the builder if, as the land buyer, you still have the right to choose your own contractor afterwards.
However, if the land purchase contract (or related agreements, e.g., simultaneous timing) states that you must build with the company Eyalda Ismeinbruder Machtdischgutepreis, then this is basically a developer contract disguised as something else and bound together, which can have tax disadvantages for you.
Many buyers think: “I already bought the land before construction, so it’s definitely my land (correct) and I’m the builder (wrong).” In fact, you have purchased a plot of land that will be developed in the future. In the worst case, you end up owning a property contaminated by a developer insolvency disaster ;-)
Seridan schrieb:
Only if you own the land beforehand, or buy it first, do you pay transfer tax only on the land. Or am I completely wrong here? Correct, you are mistaken: if you buy the land along with the house, both belong together and are treated that way for tax purposes. Whether the house is still just a dream before payment (or before the obligation for acceptance and payment) does not change this connection.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Seridan schrieb:
I don’t know exactly where you live. We live in the Heilbronn region / Baden-Württemberg. We’ve been searching for a property (either an existing one or new construction) for seven years and you find nothing—at least nothing decent. Either prices that are outrageously high, or dilapidated buildings where you’d have to invest another 250,000 euros (about 270,000 USD) just to get them in shape. You think you’re telling me something new? It wasn’t any different for us! We searched for 5 years before we found something. But I would never have come up with such a ridiculously desperate idea.
You don’t have to deliberately act like a lemming, right?
Well, it doesn’t sound very promising.
My situation was somewhat similar. I found a shell construction from a developer. They also offered to complete the house for me. Online research turned up only one entry in the commercial register and a one-time change of managing director. No website, no references, no one who seemed to have worked with them before.
At the first meeting, I was given a list of references (incidentally, the former managing director showed up). Almost all were from the 1990s, then there was a long gap. Some projects were in the village where a colleague lives. I asked him about it, and the feedback was disastrous. Poor workmanship, unpaid tradespeople, the company had gone bankrupt...
I had already involved a construction supervisor to oversee the technical aspects on my behalf. He called several tradespeople, and everyone’s response to the name was the same: “We don’t work for them” or “only if paid in advance.” Even the local utility company declined.
I then decided not to have this company complete the further construction. However, the existing structure was already there and had to be evaluated in its condition and workmanship. Some defects were visible, but all could be fixed (nothing substantial). We have now done this and I’m managing the construction through individual contracts with the construction supervisor acting as site manager. I’m very glad to have parted ways with the others. Some hidden issues still emerged—for example, there was an additional section of slab foundation for an extension, which the building authority informed me was not approved and that I would have to demolish it or obtain approval.
A friend had a similar experience with a developer (housing estate with restrictions). They really wanted the plot, but had such a bad impression of the developer that they hired a supervisor themselves. Apparently, the neighbors bought their way out of the developer’s restrictions for the plot by paying a substantial extra fee.
If the real estate market is so weak that you absolutely have to have this plot… I would strongly recommend consulting a professional on how to best protect yourself. For example, only pay for work that has been completed and accepted, bring in your own competent construction supervision… If you can’t sufficiently protect yourself, it’s best to walk away, no matter how hard that is.
My situation was somewhat similar. I found a shell construction from a developer. They also offered to complete the house for me. Online research turned up only one entry in the commercial register and a one-time change of managing director. No website, no references, no one who seemed to have worked with them before.
At the first meeting, I was given a list of references (incidentally, the former managing director showed up). Almost all were from the 1990s, then there was a long gap. Some projects were in the village where a colleague lives. I asked him about it, and the feedback was disastrous. Poor workmanship, unpaid tradespeople, the company had gone bankrupt...
I had already involved a construction supervisor to oversee the technical aspects on my behalf. He called several tradespeople, and everyone’s response to the name was the same: “We don’t work for them” or “only if paid in advance.” Even the local utility company declined.
I then decided not to have this company complete the further construction. However, the existing structure was already there and had to be evaluated in its condition and workmanship. Some defects were visible, but all could be fixed (nothing substantial). We have now done this and I’m managing the construction through individual contracts with the construction supervisor acting as site manager. I’m very glad to have parted ways with the others. Some hidden issues still emerged—for example, there was an additional section of slab foundation for an extension, which the building authority informed me was not approved and that I would have to demolish it or obtain approval.
A friend had a similar experience with a developer (housing estate with restrictions). They really wanted the plot, but had such a bad impression of the developer that they hired a supervisor themselves. Apparently, the neighbors bought their way out of the developer’s restrictions for the plot by paying a substantial extra fee.
If the real estate market is so weak that you absolutely have to have this plot… I would strongly recommend consulting a professional on how to best protect yourself. For example, only pay for work that has been completed and accepted, bring in your own competent construction supervision… If you can’t sufficiently protect yourself, it’s best to walk away, no matter how hard that is.
Altai schrieb:
My situation was somewhat similar. I found a shell construction from a developer. They would have completed the house for me. [...]
I then decided NOT to have this company handle the further construction. Do I understand your story correctly: you bought the property in shell condition from the developer and then had other companies continue the construction? How did you convince the seller to agree to this change? Was your contract partner still the original developer or already the insolvency administrator?
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
@11ant: Initially, only the shell construction was advertised. The offer to complete the build was available separately as an add-on. The seller was a property developer, but the real estate agent stayed very reserved regarding the seller for a long time.
The bankruptcy affected a previous company owned by the same person, who then founded a new company, from which I have now purchased... so the bankruptcy at the end of the 1990s has nothing to do with the current project, there was just the same individual involved and the current company is not insolvent.
We (the site manager and I) have taken over the completion ourselves and it is currently ongoing.
The bankruptcy affected a previous company owned by the same person, who then founded a new company, from which I have now purchased... so the bankruptcy at the end of the 1990s has nothing to do with the current project, there was just the same individual involved and the current company is not insolvent.
We (the site manager and I) have taken over the completion ourselves and it is currently ongoing.
Altai schrieb:
Initially, only the structural shell was listed. The offer to complete the build was available as an additional option. Ah, yes. That’s quite rare—at least this is the first time I’ve come across a plan like that. Actually, it could be a good approach if the detailed execution planning were included. Without that, pipes, cables, and similar components are often just laid on the walls or floors, unfortunately.
Altai schrieb:
The site manager and I took over the completion ourselves, or rather, it is currently in progress. Well then: “see you again” in the house pictures thread!
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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