Property developers are companies that buy land in their own name and for their own account and usually build residential or commercial buildings on this land in order to subsequently sell it to third parties. A property developer is contractually obligated to the purchaser of the real estate for the subsequent transfer of ownership of the completed property and concludes construction contracts with building tradesmen in his own name for this purpose. The activity of a property developer requires a licence pursuant to Section 34c (1) of the Trade, Commerce and Industry Regulation Act (GewO). His obligations towards the purchaser of real estate are mainly based on the German Real Estate Agent and Property Developer Ordinance (Makler- und Bauträgerverordnung, MaBV).
Special security obligations for property developers are regulated in § 3 MaBV (see below for details). The obligations for the property developer to provide security according to §§ 2 and 7 MaBV are to be distinguished from this.
Construction supervisors are those who, in their external relationship with third parties, act only on behalf of the developer and, in their internal relationship, for the account of the party whose business the construction project is. The building supervisor prepares the building project economically and carries it out, usually on the owner's property.
Property developers, on the other hand, are - as already explained - those who prepare and carry out a building project commercially in their own name and for their own account or for the account of others. The developer is himself the builder and also acts as such to the outside world. He later sells the properties he has built.
Before the developer is allowed to accept payments, he basically has two options to secure the payment made by the buyer:
a) He can provide a guarantee to cover possible claims against him.
b) He can accept payment from the seller by means of a fixed payment plan according to
the progress of construction.
These two alternatives cannot be mixed. However, it is possible to switch from one alternative to the other during construction. In doing so, it must be made clear that the buyer is fully secured in any case.
The developer may only accept payment after construction has progressed if.
(1) the contract of sale between the trader and the principal is legally effective and the approvals required for its execution have been obtained, these requirements have been confirmed by a written notice from the notary and the trader has not been granted any contractual rights of withdrawal
(2) a priority notice in favour of the purchaser has been entered in the land register,
(3) a declaration of exemption from the financing bank is available and
(4) the building permit has been granted.
According to § 3 para. 2 MaBV, the amounts may be paid in up to seven instalments according to the progress of construction. The individual sections listed below can be combined in such a way that seven partial amounts result. In detail, these are the following sections. The percentages stated refer in each case to the total contract sum:
30 % after commencement of earthworks (if land is to be transferred).
28.0 % after completion of the building shell, including carpentry work
5.6 % for the construction of the roof surfaces and gutters
2.1 % for the rough installation of the heating systems
2.1 % for the rough installation of the sanitary facilities
2.1 % for the rough installation of the electrical systems
7.0 % for window installation, including glazing
4.2 % for the interior plastering, excluding finishing plaster work
2.1 % for the screed
2.8 % for tiling work in the sanitary area
8.4 % after completion of occupancy and step by step against transfer of possession
2.1 % for the facade work
3.5 % after full completion
100.0 % total
20 % (if heritable building rights are to be created or transferred)
as well as
32.0 % after completion of the building shell, including carpentry work
6.4 % for the construction of the roof surfaces and gutters
2.4 % for the rough installation of the heating systems
2.4 % for the rough installation of the sanitary facilities
2.4 % for the rough installation of the electrical systems
8.0 % for window installation, including glazing
4.8 % for interior plastering, excluding finishing plaster work
2.4 % for the screed
3.2 % for tiling work in the sanitary area
9.6 % after completion of occupancy and concurrently with transfer of possession
2.4 % for the facade work
4.0 % after full completion.
100.0 % Total
In § 3 para. 2 MaBV, the percentages after the first contribution (30 % or 20 %) are always stated in relation to the remaining sum. For better understanding, this is referred to the total contract sum here.