Principal

The principal is the party that is the economically and legally responsible contracting authority in the development of a construction project. Both natural persons and legal persons can be the principal. While the principal prepares construction projects in its own name, this can be done either on its own account or on behalf of third parties. If the assets of third parties are involved, the principal must have a commercial license in accordance with section 34 c of the Gewerbeordnung (GewO – German Industrial Code).1
The developer or investor (possibly as the owner of the property) is often also referred to as the principal. As the project manager, the principal must technically and economically control, coordinate and manage the individual processes of the project. The principal can assign some of its management tasks to third parties. Some of the principal’s activities are usually performed by architects, engineers and project controllers as service providers.2 At the beginning of a project phase, the principal must define clear objectives and set the project budget.3 Its main duties during the project phase include project organisation, contract management, the monitoring of costs, coordinating the approval processes and also quality and schedule management. Project finance and marketing are also the principal’s responsibility.4
Unless regulated otherwise, the principal bears the duty to ensure public safety during the construction phase and after completion. The principal is required to have the building officially accepted by way of building inspection after it is completed. Only then can the building be operated.5
In practice, project companies often perform the function of principal in order to optimize tax and legal matters (reduction of tax burden and liability).6
  • 1 Vgl. JuraForum (2015): Bauherr. Abrufbar im Internet. URL: http://www.juraforum.de/lexikon/bauherr. Stand: 13.10.2015.
  • 2 Vgl. Bohn, Thomas (2013): Management für Projektentwicklung und Planung. In: Schäfer, Jürgen; Conzen, Georg: Praxishandbuch der Immobilien-Projektentwicklung, 3. Aufl. München, S. 316.
  • 3 Vgl. Fischer, Carsten; Bischoff, Thorsten (2008): Bau-Projektmanagement. In: Schulte, Karl-Werner: Immobilienökonomie, Band I, 4. Aufl. München, S. 304.
  • 4 Vgl. Bohn, Thomas (2013): Management für Projektentwicklung und Planung. In: Schäfer, Jürgen; Conzen, Georg: Praxishandbuch der Immobilien-Projektentwicklung, 3. Aufl. München, S. 316.
  • 5 Vgl. JuraForum (2015): Bauherr. Abrufbar im Internet. URL: http://www.juraforum.de/lexikon/bauherr. Stand: 13.10.2015.
  • 6 Vgl. Fischer, Carsten; Bischoff, Thorsten (2008): Bau-Projektmanagement. In: Schulte, Karl-Werner: Immobilienökonomie, Band I, 4. Aufl. München, S. 304.
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: 25.06.2019