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Delay in construction: how to minimize the risk

Building usually takes longer than you think. Too many imponderables and dependencies make reliable planning difficult. However, with the right partners and good planning, the risk of construction delays can be minimized. "If it still takes longer than contractually agreed, there is a regular claim to compensation," says lawyer Gina Kühne from the Working Group on Construction and Real Estate Law (ARGE Construction Law) in the German Lawyers' Association.

There are many reasons for delays in construction. These include deficiencies in execution, inadequate construction coordination, too few workers or bad weather. But building owners can take countermeasures with simple means. This includes agreeing a specific completion date with the respective contractual partners. Even if the building contractor cannot specify a date, for example because the financing is not secured, he must specify the period of construction in the contract (e.g. in days or weeks). "Take any time buffers into account and insist on agreeing a completion date!" Advises Kühne. The new consumer building contract law, which has been in force since January 1, 2018, supports this demand from private builders, as Section 650 k (3) BGB requires a completion date.

Builders also have duties!

According to Kühne, sometimes it fails with the client himself, because many are not aware that they too have to comply with their own contractual obligations. “This can lead to considerable delays and, in the worst case, result in the contractual partner's right to refuse to perform.” One of the classic duties of private builders in a construction contract for a prefabricated house is the preparation of the property. This includes the removal of obstacles, bushes and undergrowth as well as construction site logistics (construction water, construction site electricity, access). "If the company has issued a notice of obstruction that meets the legal requirements, the builder must allow possible delays to be offset against the completion date if the advance work has not been done properly," warns specialist lawyer for building and architectural law Kühne. When building with several companies, the client must allow the delays in individual trades to be offset against the successor plant.

Secret weapon contractual penalty

Despite the contractually agreed deadline for completion, there are always delays. The specialist lawyer therefore recommends agreeing a contractual penalty in the construction contract in advance. “It should encourage the contracting party to perform on time and offer the builder financial compensation for financial losses suffered - without having to provide evidence of damage.” Only if the contractor cannot be blamed for the delays, he does not have to pay a contractual penalty or compensation. However, this is only the case in a few exceptional situations.

“In construction contracts without a specific date for completion, there is usually no contractual penalty. Here, building owners should first request performance with a reasonable deadline. If the contractor does not meet this deadline, there will be default afterwards ”, says Kühne. "The contractor can then be asked to compensate for damage caused by delay (rent, provision interest, etc.)." However, the client must prove the cause of the delay in performance and the damage caused and the specific amount of damage. In construction contracts with specific information on the completion date or construction time, the delay occurs automatically when the deadline is exceeded and the contractual penalty applies, insofar as it has been agreed.

In individual cases, termination for an important reason in accordance with Section 648a of the German Civil Code is conceivable, explains Kühne. However, details should be discussed with a specialized lawyer: “It is best for private builders to get legal advice before signing the building contract. The costs for this are very manageable compared to the total investment and should pay off in the end. "

Lawyer Gina Kühne

  • Specialist lawyer for building and architectural law
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