progress payments



From: Kevin Hines

I am about to sign a building contract for your typical 4 bedroom, 2 bathroom, double garage house on a slap on a levelish block.
Builder wants following progress payments.

Deposit 5%
Slab down 20%
Frame complete 20%
Enclosed 20%
Mould out 25%
Practical completion 10%

Does anyone know if this split up reflects the builders actual costs? Is there a schedule anywhere?

Is it reasonable to try and negotiate higher payments to the back end?

Any help much appreciated
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Reply: 1
From: Lewis O'Brien


Building contracts tend to be carefully regulated. In Victoria for example, the Domestic Building Contracts Act specifies progress payments that are similar to the ones you have described. There may well be a similar requirement in your state. The local consumer affairs office should be able to point you in the right direction.

However, a couple of additional thoughts:

Firstly, 10% on completion is, in my experience a bit on the low side. After all - you are only interested in the date the building is finished, but the builder has 90% of his money before you get what you want. I suggest that you try to increase the final payment by shaving earlier ones so that you ensure that your builder is as keen to finish as you are.

Secondly, ensure that the late penalties are sensible. If you have to rent another house, or pay a mortgage of $400 pw, late payment penalties of $100 pw are far too low. Make sure that if the builder is late, you won't be out of pocket.

Good Luck

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Reply: 1.1
From: Manny B

Hi Kevin,

the percentages sound about right... when I build 2 yrs ago it was as follows:

Deposit 5%
Slab 10%
Frame 15%
Lockup 35%
Fixing 25%
Completion 10%

Note: make sure you state a start date & ensure you do have completion time defined (normally in days, allowing for extra days for public holidays & bad weather) & a good penalty (as per the previous post) to ensure the builder completes it on time...

Note: another tip, ensure everything the builder agrees to include IS in the CONTRACT, otherwise you won't get it, no matter what the builder sais...


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