Construction contract: Builders should pay attention to this

Building a house is usually the largest investment in your life. If you want to protect yourself from unpleasant surprises, you should take a close look at the construction contract. In many cases, construction contracts are incomplete or contain small pitfalls that are difficult for non-experts to perceive. The result: expensive repairs and exhausting legal disputes can await you. Precisely for this reason you should spend a lot of time on legal issues. Especially when it comes to building a house, we always recommend seeking the advice of an independent building consultant. Also ask your trusted lawyer for advice. Below we will give you some tips on what you need to pay attention to in the construction contract and which contents are particularly important.

Contractual basis: VOB vs. BGB

The process of building a house usually begins with an offer, on the basis of which a construction contract is then concluded. This is important for asserting your rights against the building company in case of discrepancies. In most cases it is possible to negotiate different contractual bases here:

The VOB contract

For example, you can define a VOB contract that follows the rules of procurement and contract regulations for construction works (VOB). It was originally specialized in public construction projects, but is now also used for the construction of private homes. Important: The VOB is not a law, but rather general terms and conditions.

The BGB contract

The BGB contract is based on the contract law of the German Civil Code (BGB). The new law on construction contracts has been in force here since 1 January 2018. This means that for the first time the BGB explicitly regulates construction contracts.

Mixed contracts are also often used, which take into account both VOB and BGB rules. Rely on the advice of your independent construction consultant or lawyer.

Construction contract: these are the most important contents

For you, as a future builder, the first important thing is what content should be included in the construction contract. This includes:

• The general conditions (GTC) of the construction company
• A detailed description of the construction and service (execution documents)
• Payment plan or installment plan
• Special contractual conditions (e.g. also special requests from the customer)
• Contractual reservations (right of withdrawal)

You should definitely pay attention to this in the construction contract

There are always construction contracts that present unfavorable pitfalls or even try to deceive you. We have summarized some points that you should definitely pay attention to in the construction contract:

Pay attention to unclear words

The biggest obstacle in construction contracts is unclear wording. And in most cases these are hidden in the service description. You should also insist on a warranty in case of defects. It’s usually at least five years.

The fundamental point: the description of the service

The service description is probably the most important content of your construction contract. Make sure every detail is included here. For many builders the installation of doors or floors is so obvious that this point is forgotten in the construction contract. Therefore, all steps should be listed in detail in the service description, from excavating the basement to the subsequent power supply. Negligence in a construction contract can be costly.

The last step: definitive acceptance

The final inspection is an important point in the construction contract for builders. If the damage is not recognized here, it cannot be reported at all or only with considerable effort. On the day of the final inspection, you, the customer, become the owner of the home. Congratulations on your dream home!

But be careful: once the house has been delivered, the promoter or construction company no longer offers any insurance coverage. From now on, make sure you have valid building insurance, which covers for example damage from fire, lightning, storm, hail or damage caused by tap water.

Do you want to build a house? Don’t hesitate to arrange a non-binding consultation with our Rötzer experts. You can also read our home building checklist here.