Before starting a construction project or a larger renovation it is worth paying attention not only to the legal questions of building, but also to the technical plans, the budget, the choice of contractor and the deadlines. These are of course fundamental questions, but the appropriate legal background is at least as important.
The Civil Code was amended in several respects with effect from 1 March 2026. The amendments do not concern construction projects alone, but they provide a good opportunity for those planning to build, for property developers and for clients to consider whether their agreements with the contractor, the designer or another contractual partner protect their interests adequately.
During a construction project a significant part of later legal disputes does not arise when the defect or the delay becomes visible, but much earlier: when the parties fail to set out with sufficient precision who is obliged to perform what, by what deadline, with what technical content and for what consideration.
Why is an appropriate works contract important?
In the case of construction or renovation, the works contract concluded with the contractor is not a mere formality. It is the document that later determines what the parties regard as performance in accordance with the contract, when delay can be established, in what case a contractual penalty is payable, how additional works are to be handled, and what rights the client has in the event of defective performance.
In practice many legal disputes stem from the parties concluding only a short, general agreement, or from the work starting solely on the basis of a price quotation, e-mail correspondence or an oral agreement. This can be particularly risky where the value of the investment is significant, the technical content is complex, or the construction is carried out in several phases.
A well-prepared works contract must therefore contain not only the contractor’s fee and the deadline, but must also regulate in detail the conditions of performance, the technical content, the order of handover and acceptance, the rectification of defects, the payment schedule and the consequences of breach of contract.
Delay in construction: when and how can a claim be enforced?
One of the most common problems on building sites is the slipping of the construction deadline. Delay in itself can cause significant prejudice, particularly where the client finances the investment from a loan, would move into the new property from a rented home, or has the property built for sale or letting.
It is advisable to regulate the legal consequences of delay in advance in the contract. One of the most common instruments for this is the penalty for delay, which means a sanction of a predetermined amount or method of calculation in case the contractor fails to meet the undertaken deadline for reasons attributable to it.
A contractual penalty works effectively, however, only if the contract precisely defines the deadline for performance, any interim deadlines, the starting date of the delay, and also the cases in which the contractor may be exempted from liability. Otherwise a dispute may later arise as to whether the delay can be established at all.
Additional and extra works: frequent sources of dispute
During construction, works often arise that were not included in the original contract, or not in sufficient detail. In such cases a recurring question is whether the contractor is entitled to further remuneration, and whether the client is obliged to pay the costs that arise subsequently.
In the area of additional and extra works, prior written consultation is particularly important. From the client’s point of view it is risky if the contractor indicates only after the work has been carried out that it wishes to claim a further amount on top of the contractor’s fee. From the contractor’s side, on the other hand, it can be a problem if it cannot subsequently prove the value of works that were actually carried out and necessary.
It is therefore advisable to set out in the contract on what conditions the contractor may carry out additional work or work exceeding the original technical content, whether a prior written order is required, how the price is determined, and with what documents performance must be evidenced.
Defective performance, warranty and guarantee
Another frequent problem in construction is defective performance. This may include construction defects, the use of materials of inadequate quality, implementation differing from the plans, water leaks, cracks, thermal insulation defects, mechanical engineering problems or any other deficiency because of which the completed work does not comply with the contract or with the requirements of intended use.
In such a case the client must above all be able to prove that the defect exists, that it is connected to the contractor’s performance, and that it is entitled to have the defect rectified or to apply another legal consequence. From the contractor’s side it may be relevant that the defect stems not from its performance but, for example, from the client’s instruction, from improper use, from the work of another contractor or from subsequent intervention.
For the purposes of later evidence the handover and acceptance procedure is of particular importance. At handover it is advisable to draw up a detailed record, to set out the defects item by item, to document them with photographs and to set a deadline for rectification. In higher-value or disputed matters the involvement of an expert may also be warranted.
Payment schedule and securities
In construction it is particularly important that the payment schedule is in line with actual performance. It can be risky for the client to pay too large an amount in advance while the contractor’s performance cannot yet be verified. On the contractor’s side, on the other hand, it may be a legitimate claim that an appropriate advance or interim invoice should be linked to the material costs or to the financing of the work processes.
A balanced contract therefore usually links the individual payment instalments to a degree of completion, to certification by the technical supervisor or to partial handover and acceptance. In larger investments the use of retention, security, contractual penalty, a bank guarantee or another contractual guarantee may also be advisable.
The precise regulation of the payment and performance conditions is in the interest of both parties. The client can thus avoid paying a significant amount where performance is inadequate, while the contractor can see clearly which instalment of the fee is linked to which performance.
Why is it worth turning to a lawyer before the contract is signed?
Many people seek legal assistance only once the contractor is already in delay, the work is defective, a dispute has arisen between the parties, or the contractor demands a further fee. In such cases there is of course a possibility of enforcing claims, but prevention is generally considerably more effective and less costly.
Having a construction or renovation contract reviewed by a lawyer before signing can help to reveal the risks that may later lead to a serious legal dispute. This may include, for example, imprecise technical content, a missing deadline, the possibility of unilateral amendment of the contract, inadequate rules on contractual penalties, an uncertain rule on additional works, or an incomplete provision on defective performance.
A prior legal review is particularly warranted where the value of the investment is significant, where the contractor sends its own draft contract, where the payment schedule includes advance payment, or where the client buys a newly built property or has one built.
What should those building or renovating in 2026 look out for?
Before a construction project or a larger renovation it is advisable to clarify in particular the following questions:
- exactly what the technical content covers;
- who obtains the necessary permits, consents and documents;
- when the construction starts and when it is completed;
- whether there is a detailed payment schedule;
- on what conditions the contractor may claim an additional fee;
- what contractual penalty is payable in the event of delay;
- how handover and acceptance take place;
- within what deadline defects must be rectified;
- what warranty and guarantee obligations the contractor is subject to;
- in what case the contract may be terminated or withdrawn from.
A properly prepared contract is not only a legal document, but one of the most important instruments for the security of the investment.
Legal assistance with construction, renovation and works contracts
Our office provides assistance in property law and contractual matters with the preparation, review and amendment of construction, renovation and works contracts, as well as with handling legal disputes arising from contractor’s delay, defective performance, additional works or accounting disputes.
If you are about to start a construction project or a larger renovation, or would like to have the draft contract sent by the contractor checked, please contact our office with confidence.
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