Security for remuneration (section 1170b ABGB)
The construction contractor's claim to security for the remuneration still outstanding, by law up to one fifth of the remuneration (section 1170b ABGB).
Under section 1170b ABGB the contractor of a building may demand from the client a security for the remuneration still outstanding: up to one fifth (20 per cent) of the agreed remuneration; for short-term contracts to be performed within three months, up to two fifths (40 per cent).
If the security is not provided despite the setting of a deadline, the contractor may refuse performance and in certain circumstances dissolve the contract. The provision protects the contractor against the risk of the client's insolvency and supplements the rules on remuneration.
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Legal basis
Statutory texts for orientation; the version in force at the relevant time prevails.
This explanation gives a general overview of Austrian law and does not replace advice in an individual case. The specific circumstances of your construction project are always decisive.
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Remuneration for the works
The contractor's payment for the works produced; in principle due only on completion of the works (section 1170 ABGB).
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Contract for work
A contract under which the contractor undertakes to produce a specific result (the works) in return for payment (sections 1165 ff ABGB).
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Retention money
A portion of the remuneration withheld by the client during the warranty period as security for defects; typically a few percent of the final invoice.
Defects, a remuneration dispute, looming litigation?
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