💶 Late payment and security for construction contractors

When the customer does not pay: default interest, the 40-euro flat fee, security under § 650f BGB and the dunning procedure.

late payment default interest § 650f BGB security for construction contractors (Bauhandwerkersicherung) dunning procedure (Mahnverfahren) late payment flat fee claim

In brief

If the customer does not pay, you have rights.

Interest: 9 percentage points above the base rate for business customers, 5 percentage points for private individuals.
Flat fee: 40 euros if your customer is not a consumer.
Security: For construction services you can demand security for the outstanding payment. If the deadline passes without result, you may stop work or terminate. This does not apply against consumers under consumer construction contracts, nor against public-law legal entities and public-law special funds whose assets cannot be subject to insolvency proceedings, nor to property developer contracts (§ 650u BGB).
Dunning procedure: If there is no payment despite a reminder, the court route is possible.

Step by step

Document the invoice and payment deadlineDefault can only be proven with a verifiable invoice.
Send a reminderWrite to the customer and set a deadline.
Demand securityFor construction services, security can be demanded under § 650f BGB.
Go to courtPayment order or lawsuit; get advice first.

Deadlines

9 percentage points

Default interest above the base rate for payment claims where no consumer is involved.§ 288 Abs. 2 BGB

5 percentage points

Default interest above the base rate for consumers.§ 288 Abs. 1 BGB

40 euros

Flat fee when a debtor who is not a consumer is in default.§ 288 Abs. 5 BGB

10 % / 2 % / 5 %

Security covers ancillary claims at 10 percent; the contractor bears the usual costs of the security up to 2 percent per year; on termination after the deadline expires, 5 percent of the payment attributable to the part not performed.§ 650f BGB

Watch out – common mistakes

§ 650f BGB does not apply to consumers under consumer construction contracts, nor against public-law legal entities and public-law special funds whose assets cannot be subject to insolvency proceedings (§ 650f Abs. 6 Nr. 1 BGB), nor to property developer contracts (§ 650u BGB; Abs. 6 Nr. 2). Deviating agreements are invalid.
The 40-euro flat fee applies only if the debtor is not a consumer.
Objections by the customer (defects) change the situation. Before stopping work, check whether the requirements are met.

In depth · legal basis, figures and practice – for advisers and professionals

Default interest and flat fee

§ 288 BGB: the default interest rate is five percentage points above the base rate per year. For legal transactions in which a consumer is not involved, the interest rate for payment claims is nine percentage points above the base rate. If a debtor who is not a consumer is in default, the creditor can demand a flat fee of 40 euros. Agreements that exclude or limit interest or the flat fee are in principle invalid (§ 288 Abs. 6 BGB). The current base rate is published by the Deutsche Bundesbank; it was not looked up here. The requirements for default (§ 286 BGB, reminder or 30-day rule) were not checked verbatim here.

Security for construction contractors

Under § 650f BGB, the contractor for a building can demand security for the agreed payment that has not yet been paid. Ancillary claims are set at 10 percent of the claim to be secured. Possible forms of security are a deposit, a bank guarantee or a guarantee from a credit institution or credit insurer. The contractor bears the usual costs of the security up to 2 percent per year, except in the case of unfounded objections by the customer. If the customer does not provide it after a deadline is set, the contractor can refuse to perform or terminate and, on termination, receives 5 percent of the payment attributable to the part not performed. Under § 650f Abs. 6 BGB the provision does not apply against public-law legal entities and public-law special funds whose assets cannot be subject to insolvency proceedings (No. 1), nor to property developer contracts under § 650u BGB (No. 2), nor against consumers under consumer construction contracts.

Court dunning procedure

The dunning procedure is conducted at local courts (Amtsgerichte); jurisdiction and procedure were not checked here against a primary source. Chambers and lawyers provide information on this.

Limitation of the claim

The standard limitation period is three years (§ 195 BGB). For the start of the period (§ 199 BGB) see the statute; not evaluated in detail.

Who is responsible

Chamber of crafts (legal information for members)
Lawyers
Local court (Amtsgericht) or central dunning court

Quick questions

Worum geht es bei „Late payment and security for construction contractors“?

When the customer does not pay: default interest, the 40-euro flat fee, security under § 650f BGB and the dunning procedure.

Which deadlines and figures matter?

9 percentage points: Default interest above the base rate for payment claims where no consumer is involved. (§ 288 Abs. 2 BGB)
5 percentage points: Default interest above the base rate for consumers. (§ 288 Abs. 1 BGB)
40 euros: Flat fee when a debtor who is not a consumer is in default. (§ 288 Abs. 5 BGB)
10 % / 2 % / 5 %: Security covers ancillary claims at 10 percent; the contractor bears the usual costs of the security up to 2 percent per year; on termination after the deadline expires, 5 percent of the payment attributable to the part not performed. (§ 650f BGB)

What should I do first?

Document the invoice and payment deadline: Default can only be proven with a verifiable invoice.
Send a reminder: Write to the customer and set a deadline.
Demand security: For construction services, security can be demanded under § 650f BGB.

What do I need to watch out for?

§ 650f BGB does not apply to consumers under consumer construction contracts, nor against public-law legal entities and public-law special funds whose assets cannot be subject to insolvency proceedings (§ 650f Abs. 6 Nr. 1 BGB), nor to property developer contracts (§ 650u BGB; Abs. 6 Nr. 2). Deviating agreements are invalid.
The 40-euro flat fee applies only if the debtor is not a consumer.
Objections by the customer (defects) change the situation. Before stopping work, check whether the requirements are met.

Evidence

§ 288 BGB, gesetze-im-internet.de, retrieved 20 September 2026
§ 650f BGB, gesetze-im-internet.de, retrieved 20 September 2026
§ 195 BGB, gesetze-im-internet.de, retrieved 20 September 2026

As of

September 2026 · Sources and method

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