Dear future homeowners and those intending to become one,
I would like to take the opportunity of a user's question to point out some of the nuances – or better, potential pitfalls – in contract drafting. In the specific case, the homeowners were informed during planning that the finished ground floor must be at least 35 cm (14 inches) above ground level to prevent possible construction damage caused by moisture. The result might be that the occupants end up accepting unwanted steps leading into the house or incur additional costs for waterproofing that was not initially agreed upon in the contract.
This is a classic example of surprises during the planning or construction phase. Usually, a building contract with a general contractor – hereafter simply called GC – is signed before planning, so the exact vertical positioning of the house is not clearly defined. In the contract, the GC outlines the prerequisites upon which the contract price is based. The issue of vertical positioning is often mentioned only briefly and superficially, for example, stating that the finished floor is to be 30 cm (12 inches) above ground level. This sounds reasonable, as we all know it is good if water drains away from the house. Sometimes, however, some homeowners assume that they can compensate for this with landscaping to have as smooth a transition to the garden as possible.
Possible outcomes of the initially described case might be:
- the occupants accept steps leading into the house that they did not want
- additional costs (change orders) arise due to waterproofing not contractually agreed upon
- the homeowners add soil around the house after completion to such an extent that the height difference stipulated by the GC as a prerequisite is no longer maintained – should moisture damage then occur, the homeowners will be held responsible.
None of these outcomes are satisfactory. While the GC can be criticized for insufficient clarification, legally the GC is well protected.
The example described above is just one of many pitfalls hidden in the seemingly harmless wording of building contracts and their technical specifications. Even more challenging to assess than the fine print is what is not written at all.
Please forgive me for advocating, as a professional construction advisor, that an external expert consultation take place before signing the contract. The greatest potential for saving costs and avoiding trouble lies, after all, in the pre-contract phase.
I would like to take the opportunity of a user's question to point out some of the nuances – or better, potential pitfalls – in contract drafting. In the specific case, the homeowners were informed during planning that the finished ground floor must be at least 35 cm (14 inches) above ground level to prevent possible construction damage caused by moisture. The result might be that the occupants end up accepting unwanted steps leading into the house or incur additional costs for waterproofing that was not initially agreed upon in the contract.
This is a classic example of surprises during the planning or construction phase. Usually, a building contract with a general contractor – hereafter simply called GC – is signed before planning, so the exact vertical positioning of the house is not clearly defined. In the contract, the GC outlines the prerequisites upon which the contract price is based. The issue of vertical positioning is often mentioned only briefly and superficially, for example, stating that the finished floor is to be 30 cm (12 inches) above ground level. This sounds reasonable, as we all know it is good if water drains away from the house. Sometimes, however, some homeowners assume that they can compensate for this with landscaping to have as smooth a transition to the garden as possible.
Possible outcomes of the initially described case might be:
- the occupants accept steps leading into the house that they did not want
- additional costs (change orders) arise due to waterproofing not contractually agreed upon
- the homeowners add soil around the house after completion to such an extent that the height difference stipulated by the GC as a prerequisite is no longer maintained – should moisture damage then occur, the homeowners will be held responsible.
None of these outcomes are satisfactory. While the GC can be criticized for insufficient clarification, legally the GC is well protected.
The example described above is just one of many pitfalls hidden in the seemingly harmless wording of building contracts and their technical specifications. Even more challenging to assess than the fine print is what is not written at all.
Please forgive me for advocating, as a professional construction advisor, that an external expert consultation take place before signing the contract. The greatest potential for saving costs and avoiding trouble lies, after all, in the pre-contract phase.
B
Bauexperte8 Oct 2012 12:19Hello baucoach,
I can fully agree with that!
Unfortunately, it is easier to “push a camel through the eye of a needle,” as in my experience, the situation cannot be clearly divided into black and white, or simply “bad general contractor (GC)/builder/subcontractor and poor client.” Many clients find it difficult to understand that reviewing and evaluating their construction documents can save them actual money and trouble—let alone the benefits of “external” construction supervision measures. The resources they need to invest in one or both of these measures often conflict with their trust in their own abilities. That the overwhelming majority of decisions in favor of a GC/builder/subcontractor tend to be made based on the smallest number in the bottom right corner is just a side note.
Two weeks ago, I attended a trade fair in the Rhineland. Next to my host was a booth representing the local consumer protection agency NRW. As usual at fairs, there were some downtime periods, which I used to maintain contacts with the local consumer protection agency and a master craftsman guild representative. One topic of conversation was the practice of inaccurately submitted energy-saving regulation certificates and the discrepancies between client-signed construction contracts and the actual execution or implementation during the construction process. I was quite surprised to discover that some “tricks” are now even used by providers I had previously considered reputable. If, as an “old hand” in this profession, I am left speechless—how should a layperson without professional support recognize the pitfalls?
My current hope rests with the courts and judges; recently, more rulings have been made in favor of clients. On the one hand, this prevents clients from arbitrarily withholding payments, and on the other, it requires them to better fulfill their cooperation duties. The coming years may be interesting not only in terms of renewable energy and new building materials but also in a shift of mindset on the client’s side.
Kind regards
baucoach schrieb:
Please forgive me for advocating professional external advice before signing a contract, as I work professionally as a construction supervisor. The greatest potential for saving money and avoiding problems is indeed in the phase before the contract.
I can fully agree with that!
Unfortunately, it is easier to “push a camel through the eye of a needle,” as in my experience, the situation cannot be clearly divided into black and white, or simply “bad general contractor (GC)/builder/subcontractor and poor client.” Many clients find it difficult to understand that reviewing and evaluating their construction documents can save them actual money and trouble—let alone the benefits of “external” construction supervision measures. The resources they need to invest in one or both of these measures often conflict with their trust in their own abilities. That the overwhelming majority of decisions in favor of a GC/builder/subcontractor tend to be made based on the smallest number in the bottom right corner is just a side note.
Two weeks ago, I attended a trade fair in the Rhineland. Next to my host was a booth representing the local consumer protection agency NRW. As usual at fairs, there were some downtime periods, which I used to maintain contacts with the local consumer protection agency and a master craftsman guild representative. One topic of conversation was the practice of inaccurately submitted energy-saving regulation certificates and the discrepancies between client-signed construction contracts and the actual execution or implementation during the construction process. I was quite surprised to discover that some “tricks” are now even used by providers I had previously considered reputable. If, as an “old hand” in this profession, I am left speechless—how should a layperson without professional support recognize the pitfalls?
My current hope rests with the courts and judges; recently, more rulings have been made in favor of clients. On the one hand, this prevents clients from arbitrarily withholding payments, and on the other, it requires them to better fulfill their cooperation duties. The coming years may be interesting not only in terms of renewable energy and new building materials but also in a shift of mindset on the client’s side.
Kind regards
B
Baumensch358 Oct 2012 15:24When you receive the construction contract, who can you turn to for a quick review of the building specifications and the contract? How can I recognize their expertise? Is it possible to agree on confidentiality? I’m just saying: small town… everyone knows everyone.
B
Bauexperte8 Oct 2012 15:39Hello,
No one intends to misuse your data; at least no one who is reputable!
You can, among others, hire any attorney you trust who specializes in construction law, consumer advice centers, independent experts, or consulting services like ours. It is always important to review the documents as a whole and that the person checking them has sufficient experience in construction. No matter who you ultimately choose, this money is always well spent!
Kind regards
Baumensch35 schrieb:
When you receive the construction contract,....... who can you contact to have the construction description and the contract reviewed on short notice? How do I recognize their competence? Is it possible to agree on confidentiality? I’m just saying: small town,... everyone knows everyone.
No one intends to misuse your data; at least no one who is reputable!
You can, among others, hire any attorney you trust who specializes in construction law, consumer advice centers, independent experts, or consulting services like ours. It is always important to review the documents as a whole and that the person checking them has sufficient experience in construction. No matter who you ultimately choose, this money is always well spent!
Kind regards
Hello Baumensch,
A construction contract, a building and service specification, or any other offers for construction services should be reviewed externally—that is, by someone who has no economic ties to the provider. Of course, proven expertise should also be a prerequisite. Proof of expertise might be a relevant qualification, for example, a civil engineer with experience in building construction, an architect, or similar. It is important to distinguish between legal advice—which only lawyers are authorized to provide—and technical or professional advice, as discussed here. Naturally, qualification alone does not guarantee proper advice.
The issue we describe is not limited to the technical aspects of construction, as some “construction experts” might offer; it is primarily about identifying subtle details in contract drafting—this truly requires experience in reading and evaluating contractual documents.
When it comes to reviewing contract documents, the advisor does not need to be local—much communication is done by email and phone anyway. However, for ongoing construction supervision, it makes sense to choose an advisor from the nearby area, depending on how much oversight you want.
Confidentiality can, of course, be agreed upon. This is also part of clarifying the scope of the advisory service. Often, clients initially have a good feeling about the provider and don’t want to strain the relationship by involving external construction supervision, as it can appear to signal distrust. This is understandable but also risky. With such a significant investment, you should not rely solely on an initial gut feeling. In my experience, reputable construction companies have no problem when clients make it clear that they simply want additional assurance.
If someone still prefers discreet advice and wants the construction supervisor to remain in the background, it is practical for clients to receive a specific checklist from the advisor after the offers have been evaluated. With this checklist or list of questions, clients can then ask their providers targeted inquiries. Therefore, very important: always get documents to take home and never sign anything immediately.
Basically, clients often decide based on their “gut feeling,” while construction supervision should objectively and practically review and assess the offers—as a purely rational counterbalance. Consideration to avoid upsetting the good relationship with the customer advisor of a housing provider is completely out of place. In the end, it is only about ensuring the smoothest possible, defect-free construction within the planned budget.
It is still a common phenomenon that people hesitate to involve professional support when building a house—yet we see doctors or lawyers whenever questions or issues arise.
A construction contract, a building and service specification, or any other offers for construction services should be reviewed externally—that is, by someone who has no economic ties to the provider. Of course, proven expertise should also be a prerequisite. Proof of expertise might be a relevant qualification, for example, a civil engineer with experience in building construction, an architect, or similar. It is important to distinguish between legal advice—which only lawyers are authorized to provide—and technical or professional advice, as discussed here. Naturally, qualification alone does not guarantee proper advice.
The issue we describe is not limited to the technical aspects of construction, as some “construction experts” might offer; it is primarily about identifying subtle details in contract drafting—this truly requires experience in reading and evaluating contractual documents.
When it comes to reviewing contract documents, the advisor does not need to be local—much communication is done by email and phone anyway. However, for ongoing construction supervision, it makes sense to choose an advisor from the nearby area, depending on how much oversight you want.
Confidentiality can, of course, be agreed upon. This is also part of clarifying the scope of the advisory service. Often, clients initially have a good feeling about the provider and don’t want to strain the relationship by involving external construction supervision, as it can appear to signal distrust. This is understandable but also risky. With such a significant investment, you should not rely solely on an initial gut feeling. In my experience, reputable construction companies have no problem when clients make it clear that they simply want additional assurance.
If someone still prefers discreet advice and wants the construction supervisor to remain in the background, it is practical for clients to receive a specific checklist from the advisor after the offers have been evaluated. With this checklist or list of questions, clients can then ask their providers targeted inquiries. Therefore, very important: always get documents to take home and never sign anything immediately.
Basically, clients often decide based on their “gut feeling,” while construction supervision should objectively and practically review and assess the offers—as a purely rational counterbalance. Consideration to avoid upsetting the good relationship with the customer advisor of a housing provider is completely out of place. In the end, it is only about ensuring the smoothest possible, defect-free construction within the planned budget.
It is still a common phenomenon that people hesitate to involve professional support when building a house—yet we see doctors or lawyers whenever questions or issues arise.
B
Baumensch358 Oct 2012 17:19Thanks for that, now that’s a statement.
We are currently on hold;
planning and costs are expected to be finalized at the beginning of November,
then we will move on to the details.
Wishing you a successful week!
And thanks again……
We are currently on hold;
planning and costs are expected to be finalized at the beginning of November,
then we will move on to the details.
Wishing you a successful week!
And thanks again……
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