What does a reasonable payment plan look like for a general contractor? We have one in the construction contract and would like to review it critically.
It is difficult to make a general statement. This also depends on the construction method. For example, a basement is an enormous cost driver at the beginning. The shell construction should not exceed 50%. This is a rough guideline. Additionally, at least 3.5% should be withheld after full completion. Ideally, this would be 5%. § 3 of the Real Estate Developers and Brokers Ordinance as a note. Here is an example of a payment plan according to construction progress. This would be a pretty good one, but also relatively unrealistic.
1. Start of earthworks 2% of the purchase price 2. Completion of foundations with base slab 8% 3. Completion of ground floor masonry with concrete ceiling 15% 4. Completion of the roof frame 15% 5. Completion of roof covering 8% 6. Rough installation of the heating system 3% 7. Rough installation of the sanitary system 3% 8. Rough installation of the electrical system 3% 9. After installation of windows 10% 10. Completion of interior plastering 6% 11. Completion of screed work 3% 12. Completion of tiling work 4% 13. Ready for occupancy 12% 14. Facade work 3% 15. Full completion (handover) 5%