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Developer contract and BTVG

Protection of buyers under the Austrian Developer Contract Act: instalment schedule, security models, escrow and unwinding when problems arise.

Anyone who buys an apartment or a house before completion and makes payments for it is particularly in need of protection. The Austrian Developer Contract Act (BTVG) protects these buyers and prescribes binding securities.

We review developer contracts before signature, because once signed the room for manoeuvre is small. At the centre are the instalment schedule, the security model and the question of what happens in the event of delay or insolvency.

What the BTVG governs

The BTVG applies where buyers pay more than a small amount before completion. It obliges the developer to secure the payments and provides for an escrow trustee who monitors compliance. Without effective security the payment obligations are limited.

The security models

The law recognises several ways of securing the buyer payments. Which model is agreed determines how well you are protected in a crisis.

  • security by land register entry with payment according to construction progress (instalment schedule)
  • security under the law of obligations through a bank guarantee or insurance
  • security by way of a lien on the contractual object
  • monitoring by an escrow trustee

Reviewing before signature

What is decisive are an instalment schedule that complies with the law, a complete building specification, a clearly governed completion date and a reasonable contractual penalty for delay. Rights of withdrawal and the structure of the escrow relationship also need to be reviewed.

How we support you

  • review of the developer contract and the security model before signature
  • examination of the instalment schedule, the building specification and the deadlines
  • enforcement of rights in the event of delay or defects
  • support with unwinding and in the event of the developer insolvency

This article provides 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.

Frequently asked questions

What clients often ask.

What happens if the developer becomes insolvent? +
What is decisive is the agreed security model. With an instalment schedule secured by land register entry you only pay according to construction progress, which limits the loss. A bank guarantee secures payments already made. Without effective security, by contrast, a considerable loss threatens.
Which security model is safest for me? +
That can only be assessed in the individual case. The instalment schedule according to construction progress protects you from paying for works not yet delivered. A bank guarantee protects payments already made. We assess which model suits your project and your risk.
Can I withdraw from a developer contract? +
The BTVG provides for rights of withdrawal under certain conditions, for example where mandatory particulars are missing. Alongside this there may be contractual or general civil-law grounds for withdrawal. Deadlines here are often short, so you should seek legal advice quickly.
What does the instalment schedule according to construction progress mean? +
Under the statutory instalment schedule, payments may only be demanded in line with the actual construction progress, for example after the shell, the roof or completion. In this way you never pay materially more than has already been built. This is a central protective mechanism of the BTVG.
Related topics

This may also be relevant to you.

Construction defects and warranty

Identify, notify and enforce defects in the building. Remedy, price reduction, rescission and the warranty periods under Austrian civil law.

Construction litigation and evidence preservation

Secure evidence before it is built over: judicial preservation of evidence, court experts and the preparation of construction litigation.

Construction contract and remuneration

Works contract, lump-sum and unit prices, additional orders, final invoice and enforcing or defending remuneration claims.

Defects, a remuneration dispute, looming litigation?

In construction law, deadlines and evidence decide. Call us directly or send an email, callback within one business day.

+43 662 6280000 [email protected] Book initial consultation (72 euros)
Contact

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Address

BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg