ᐅ Shrinkage Cracks – Acceptable Width

Hello everyone,

thank you very much for your support and explanations.

@Hausverkäufer
Regarding my question about shrinkage cracks, the site manager explained that they use this exact method with the grooving cuts. If this is a common and proven method, I will leave it at that.

BuildingExpert schrieb:


You can tell from your question that you talk too much with the person from the Homeowners’ Protection Association. In the end, exactly what I don’t appreciate about their services happens. As the client, you become more uncertain than informed, and you still have to pay for it.

That’s actually how I feel. The company has addressed certain points and revised their scope of work description. Additionally, the supplementary agreements were also updated to clarify unresolved issues. So the work of the Homeowners’ Protection Association has indeed helped me.
However, especially concerning the contract, there are three points the association insists on, and the company, presumably after consulting a construction law attorney, refuses to change.
Besides the mentioned point, one is the payment schedule. After the shell construction phase (including roof covering and some plumbing work), the company charges about 60% of the costs. The scope of work states that a maximum of 50% is allowed. However, the company explained that the 60% also covers the costs for earthworks (around 24,000 euros), so from my perspective, the 60% is justified and acceptable. The Homeowners’ Protection Association would still prefer to enforce the 50%.

For the third point, I will start a separate discussion since it would go beyond the scope here.

Thanks again for the information and support,

Yes, this is a difficult topic. The client wants to have work done first and pay afterwards, preferably with a 30-day payment term. The construction company, however, would prefer to receive a deposit before starting the project in earnest.

There are actually reputable recommendations that a shell construction accounts for about 50% of the total building costs. Of course, your building consultant’s advice is better suited to your situation. However, keep in mind that demands like these put the construction company at risk of making a loss. Everyone tries to protect themselves as much as possible within reasonable limits.

First, it should be defined how this 50% is calculated. It is often based only on the construction costs excluding planning. If you are working with a general contractor (GC), I assume that planning and architectural fees are not charged separately? These would then be included in the fixed price and can represent up to 15% of the total house price. These costs are naturally due at the beginning as well. From the perspective of a GC, therefore, up to 65% would need to be collected by the shell construction stage.

By the way, there is no clear definition in the history of the building owners’ protection association regarding what exactly counts as the shell construction. Usually, it includes the shell envelope, including masonry and roof frame. Most general contractors in our region, for example, combine the roof structure and roof covering trades. Thus, the payment milestone does not occur at shell completion but only after the roof covering, including gutters, has been finished. Another point is the continuously shortening construction periods. Everything must be ordered and paid for upfront to keep the site running smoothly. Time is money, and estimates are tight because clients are generally unwilling to pay more.

As you can see from my username, I sell houses. I cannot enter into a contract where, after payment for the roof covering, less than 59% of the total payment is collected. Less than that is not feasible because then I would be taking on a very high risk of being left unpaid by the client. That would be a very cheap build for the client. Finishing trades can still be found, and the main risk of the shell construction phase would be over. Please note that you as the client can cancel the contract at any time. The construction company cannot.
I always compare this to “a blanket that’s too short...” Fixed price, construction time guarantee, securities, and payment plan are closely linked and should be balanced. If one detail is changed, it will have an impact. For example, if appropriate payment securities are in place, the payment schedule can be adjusted.

Does your GC not have a building consultant with whom you can calmly discuss these straightforward points? After all, you will be working together for some time. It should be possible to have a confidential conversation. The building owners’ protection association will not build your house.

Hausverkäufer schrieb:
As you can tell from my username, I sell houses. I can’t make a contract where, after payment for the roofing, at least 59% of the total amount isn’t secured. Less than that is not possible because I would be taking a very high risk of being abandoned by the client and not getting paid. That would be a very cheap build for the client then. The finishing trades will be arranged, and the main risk of the shell construction is over. Please keep in mind that as the client you can cancel the contract at any time. The contractor cannot.

I more or less expected that. This is exactly what makes this forum so interesting. When someone like you is willing to share, the perspective and viewpoint of the builder is also discussed—not only the buyer’s point of view.

Hausverkäufer schrieb:
Does your general contractor not have a building consultant with whom you can calmly discuss these simple points? After all, you will be working together for some time. You should be able to talk confidentially. The Homeowners’ Protection Association certainly won’t be building your house.

The head is the building consultant. As you’ve already read in the other thread, the construction company has already provided several services in advance. To be precise, we have been in talks and planning with them for about a year now (including three new design drafts, since the first was too expensive, and the following ones didn’t fit). Everything imaginable has been discussed during the talks—but only some statements have been formally documented in writing (statements like “of course we do it this way” or “this is our standard” were not put in writing).

The penultimate meeting was with the general contractor and the Homeowners’ Protection Association. It was during that meeting that such points were fixed in writing.

Here is an excerpt from the payment schedule (I have left out the payment steps for the basement, since we will build without one):
1. After signing the contract: 5%
2. Completion of the building permit / planning permission or building notification: 5%
4. Completion of site drainage; base/foundations: 15%
6. Completion of ground floor masonry (without exterior plaster): 17%
7. After setting the roof frame: 13%
8. Completion of roofing and plumbing work: 5%

The earthworks, valued at approx. 24,000 euros, are already included here.
I also think that 60% is reasonable here. Therefore, I would keep the plan as it is.

Good evening,

f-pNo schrieb:

However, when it comes to the contract, there are three points that the Homeowners’ Protection Association insists on, but the company, apparently after consulting a construction law attorney, believes these should not be changed.
Apart from the point mentioned above, the payment plan is also an issue. After the shell construction phase (including roofing and some plumbing work), the company charges about 60% of the costs. The scope of work states that it should be a maximum of 50%. However, the company explained to me that this 60% also covers the costs for earthworks (approximately 24,000 euros). In my view, this justifies the 60% and is acceptable to me. The Homeowners’ Protection Association would still prefer to enforce the 50%.

I am still waiting for the first homeowner at the Homeowners’ Protection Association to ask for a fixed-price contract.

I have often written that the payment plan should be carefully reviewed by every prospective homeowner and that no more than 60% should be paid for the finished shell stage. The finished shell stage includes: earthworks, masonry, carpentry plus roof structure, windows including front door, as well as exterior plaster/cladding (and a bit of plumbing work included).

The ladies and gentlemen of the Homeowners’ Protection Association often go beyond the mark in this – and unfortunately other contractual details that cannot be changed – and frequently confuse property developers with project supervisors. If all the items of the finished shell stage are included in the mentioned 60%, there is no reason to refuse to sign the contract, since the paid sum roughly corresponds to the construction progress including architectural and structural engineering costs.

According to our contracts, the homeowner has paid 57% up to the finished shell stage; therefore, I find an extra 3% to be within a reasonable range.

Regards, Bauexperte

Overall, the payment schedule seems completely reasonable from my perspective. What I would change if I were you are the 5% due after contract signing. This goes against good business practices and should have been strongly challenged by the home builders’ protection association.

Payment should always be made only after the corresponding work has been completed. So, include the 5% in the foundation slab (which should be part of the foundations), and you will be well protected up to that point. If the 5% is included during the planning stage, it’s not too problematic and corresponds to what would at least be customary in our region.

However, you should insist on a 5% completion guarantee, which should be provided at the start of construction, or retain 5% as security from the foundation slab invoice. I would not accept any payment at contract signing and would not pay for the foundation slab without either a 5% security holdback or a completion guarantee.

By the way, how high is the final payment?

Hausverkäufer schrieb:
Overall, the payment schedule seems completely reasonable to me up to that point. What I would change in your position are the 5% due upon signing the contract. This contradicts good practice and should actually have been strongly challenged by the Home Builders’ Association.
Payments should always be made only after a completed service. So include the 5% in the foundation slab payment (which should be part of the foundations) and you will be very well protected until then. If the 5% is added to the planning stage, it’s not too critical and corresponds at least to what is common in our region.

All planning is already complete, the detailed construction planning is in its final stages, the building permit has been granted, approval for geothermal energy obtained, construction electricity and water arranged, etc. Oh, and the soil survey report is also done (I believe the surveyor’s initial inspection has taken place as well).
The construction company provided all the services mentioned above before the contract was signed. The philosophy was: If the client still backs out, tough luck. But according to statements, no one has withdrawn yet – I believe that too.
Therefore, in my opinion, the 5% due at contract signing is acceptable.

Hausverkäufer schrieb:

However, you should insist on a 5% completion guarantee, which should be provided at the start of construction, or withhold 5% security from the foundation slab invoice.
I would not accept any payment upon contract signing and would not pay for the foundation slab without either a 5% security retention or a completion guarantee.

By the way, how large is the final payment?

Hmm – that worries me a bit as well. It’s only 2%.
However, the entire payment plan includes 16 installments (or 14 without the basement). For example, laying the tiles (step 15) is also set at 2%. The tiles, however, are outside the contract, so the following passage in the contract applies: “If a trade is omitted, that installment will be added to the following one.”
This means the final payment will increase to 4%.