In the past, there were many ambiguities in the area of construction contract agreements between private consumers and tradespeople, which only came to light during disputes between the parties, usually with no legal success for the private client. That has now changed!

As of January 1, 2018, the new construction contract law came into effect, which also creates more clarity and regulation in construction contract agreements outside of the generally known VOB, which is usually not agreed upon between private clients and contractors anyway. This step aims to significantly improve consumer protection and to regulate previously unresolved ambiguities such as procurement of materials, construction descriptions, delay situations, and other matters. Overall, the construction contract law has a positive outcome for both parties. Below, we would like to outline some new aspects that must be observed / are required in future construction contract agreements between private clients and commercial contractors.

The Construction Description
Previously, a trade company was not obligated to hand over a detailed construction description of the planned or offered project to the private client. Unfortunately, this often resulted in the customer (usually a layperson) not knowing exactly what quality standard and type of execution they would receive.

That is now definitively over:
As of January 1, 2018, the client has the right to a clear and precise construction description. This ultimately means that the customer knows exactly what they are getting for their money, and the tradesperson does not owe any subsequent accountability or explanations for their method of execution.

Caution for Trade Companies:
If no construction description is included at the time of contract signing, the trade company will generally be at a disadvantage in disputes after the completion of the construction project and may be required to make corrections. The tradesperson has a binding obligation to issue the construction description, even if the layperson does not ask for it out of (justifiable) ignorance.

Schedule Compliance
Previously, scheduling agreements between private clients and tradespeople were not particularly binding, and specifying a completion date was not always part of the agreement.

That is also now definitively over:
Trade and construction companies must now make a binding statement regarding the completion date. If the tradesperson still falls behind schedule, damage claims can now be enforced much more easily.

Construction Documentation
In the past, many trade companies were reluctant to hand over planning documents to the client. Many trade companies even refrained from creating planning documents altogether, or had organizational difficulties in passing them on to the customer.

The legislator has now put a stop to this:
Since January 1, 2018, the client now has the right to receive important construction documents and planning documents from the construction company before the start of construction.

Payment Plan
Whereas no clear regulations regarding payment terms in construction contracts between clients and tradespeople were previously established, the situation has changed significantly since January 2018.

In addition to the already existing right to contract fulfillment security (5 percent of total construction costs), private clients now receive an additional means of leverage against tradespeople:
The trade company may issue interim invoices totaling no more than 90 percent of the overall amount. However, property developers continue to be exempt from this regulation.

Further Changes
But that was far from everything. Since the construction contract law of January 1, 2018, various new regulations have been introduced, affecting both the client and the contractor. Before any construction project, it is strongly recommended to consult a specialist lawyer in construction law to be informed about the necessary rights and obligations, because one thing is certain: It will most likely take many years before the new construction contract law becomes fully established across all trade companies.

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