How Much Should Stage (Progress) Payments Be

When you contract someone to build a new house you are required to make regular payment as each STAGE is completed. . . . But how much?

Well builders want to get paid as soon as possible so they will want the early payments to be as big as possible.

You as the purchaser need to make sure you aren’t paying for work that’s yet to be done. (See this link: If The Builder Goes Bust) You will need enough money to finish the house!

A good guide to what’s fair is found in a Victorian Government Act which lay down the following percentages of the full contract price:

    1. Deposit 5%
    2. Base 10% – (Check on this link to find  what you get; Base )
    3. Frame 15% – (link at: Frame 15)
    4. Lock Up 35% – (link at :Lock Up)
    5. Fixing 25% – (link at Fixing 25%)
    6. Completion 10% – (link at: Completion)

In Victoria many builders will ask you to sign an agreement accepting that the above payment levels don’t apply and the percentages will be similar to those shown below.

In other Australian states where there is no Act controlling the amount of progress payments then the builder is more likely to want the following values of progress payments.

    1. Deposit 5%
    2. Base 20%
    3. Frame 20%
    4. Lock Up 25%
    5. Fixing 20%
    6. Completion 10%

Think very carefully before you accept these different payments, as it increases your level of risk if things go wrong.

Before you make each progress payment, you need to check the work comprising the stage is:

    • Complete
    • Meets your contract requirements
    • Meets the building regulations

If you are not confident checking the work it may be worthwhile using an independent building consultant to check everything before you make progress payments.

If you want to check yourself you may find this link: PCI Guide useful

Whatever happens do not pay any money in advance of when the contract requires it.

 

For more information about when Progress Payments are made see Construction Stages

For similar posts see this link: Contract Documents

 

Construction Stage 5 – Completion

After Fixing comes Completion

Its probably been a long haul but we are getting to the last lap now.

Nevertheless there is still a fair bit to do including:

  • Complete Plumbing

Internally install taps, mixers, shower fittings, shower screens, and toilets

Externally finish downspouts and fix external taps.

  • Painting, Internal and External.

Internal painting will be in at least two stages. The walls and ceiling will be done before fitting of electrical fittings while woodwork/doors may well be later in the process.

  • Complete electrical.

Fitting all the power points and batten fittings.

If you are having a high level of home automation this might be quite complex and involve various stages. This stage also includes bringing the NBN service.

  • Paths and Driveways

Generally this is the front path and driveway unless you ask for more. I find it is cheaper to do the rest separately after the move.

  • Carpentry Final Fix

Room doors and cabinet doors and drawers.

  • Internal floor Finishes

Timber floating floors, tiles, or carpets.

  • Clean Up

Outside all rubbish will be removed and the site left flat. Inside it will probably be whats known as a builders clean – Dust brushed up and surfaces wiped, but not polished!

  • Pre-Completion Inspection

See PCI posts and the PCI Guide to help you through this stage

  • Deal With PCI Issues

Normally this should take one to two weeks but could be longer if there are a lot of defects.

  • Install Appliances

This will normally include oven, hob and any other expensive appliances and the hot water service. Frequently this occurs on the day of handover.

  • Hand Over Day 

The keys at last!  Make sure you are insured from the morning of handover. Also see this post on Construction Locks

Good Luck with your New House!

 

Settling In has more posts about getting your new house just right

For more on stage payments see Progress Payments

 

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