Developer contracts
When you buy from a developer, you pay for something that still has to be built. How your money is secured in the meantime, and what you actually receive in the end, is decided in the contract — long before anyone starts building.
What you see in the show apartment and what the listing depicts need not be the whole truth. What the developer owes follows above all from the contract and from the building and fittings specification. That does not make the advertising worthless, but in a dispute you have to be able to rely on it. So everything promised to you orally or in the brochure belongs in the contract before you sign.
What needs checking: the building and fittings specification, the plans, the floor areas, the completion date, the instalment plan and the security provided for your payments.
In practiceThe building specification is the actual content of the contract. Anything missing there but promised in the brochure is not lost — but you then have to prove it. Having it written in beforehand saves you that.
Austrian law on developer contracts requires your payments to be secured. In practice this is usually done through an entry in the Land Register combined with an instalment plan tied to the stage of construction.
The purchase price does not go to the developer in one sum. It is released as each stage of construction is reached, and a small part is retained beyond completion.
In practiceThat retention is your leverage if defects appear at handover. It amounts to only a small share of the price, though, and will not cover everything if the defects are substantial. Once the price is paid in full, the only route left is active enforcement.
Alterations to the fittings or the floor plan are common. But they change the contract — and usually the price and the date with it, and sometimes the warranty.
In practiceChanges belong in writing, with the price and the effect on the completion date. Arrangements made on the building site can hardly be proved later.
At handover it is recorded what is finished and what is not. Only then does the practical part begin: reporting defects, demanding that they be remedied and keeping an eye on the time limits. For an apartment, defects that were already present, or already latent, at handover must come to light within three years of handover. You can then generally still take them to court for up to three months after that. Whoever misses these time limits loses the warranty. Damages may still remain open for longer.
In practiceWhat is not recorded at handover will be disputed later. The appointment is not a formality.
The date passes, the quality is not right, and in the worst case the developer becomes insolvent. That is when it shows what the security from step 2 is worth.
In practiceThis is the moment the review at the very beginning was made for.
Send it to us together with the building and fittings specification and the instalment plan. Ideally before you sign.
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A general overview of the usual process, not advice on an individual case. Which security is provided and what the instalment plan looks like differs from contract to contract. In case of doubt the German version prevails.