Legal advice. What to watch out for when purchasing real estate.

A general contractor takes on full responsibility for the construction work. This relieves you of the task of coordination and the associated responsibility. However, it also means you lose your influence over the construction work and the choice of subcontractors.

Have you opted for a general contractor? Then you need to conclude a construction contract with them. Pay attention to the contract provisions governing the assignment of your right to have defects rectified. Some general contractors exclude any liability on their part for defects. If it then comes to a claim, it is up to you to investigate the defects as necessary and to enforce the claim against the subcontractor within the prescribed time period. This is often time- and cost-intensive, and there is no guarantee of success. That is why we advise you not to exclude the general contractor’s liability altogether.

When accepting the building work, you must check the entire building for damage and defects. Once the work has been accepted, both the guarantee period and the time period for reporting defects commence. During the guarantee period the general contractor or subcontractor must rectify all the defects reported on acceptance. If you fail to report an obvious defect at the time of acceptance, the building work is deemed to have been accepted with that defect, meaning your forfeit your guarantee entitlement. That is why it is worth taking along an independent construction consultant when you inspect the building work. Another recommendation is to conclude a construction contract that complies with Standard 118 of the Swiss Society of Engineers and Architects. That way you do not need to report the defects on acceptance, but within the following two years.

Make sure you have carefully read and understood these documents:

• Construction plan and specifications
• Cost estimate
• Sales documentation
• Planning permission
• Builder’s risk insurance
• Construction contract / general contractor agreement

With Helvetia construction insurance, you are also covered against unforeseen events. It provides building principals with financial security, enabling them to tackle their building projects with peace of mind.