Payment plan - I have the feeling it doesn't fit

Hello everyone,

we are about to sign a construction contract - we provide the land ourselves, the construction company will do the earthworks and shell construction themselves and subcontract the rest to local companies.

The draft contract includes the following payment schedule, which seems very unbalanced to me as a layperson:

[*]after building application (we are building with building notification!): 5%
[*]after base slab: 15%
[*]after ground floor ceiling: 20%
[*]after framing the roof structure: 15%
[*]after roof covering: 10%
[*]after window installation: 8%
[*]after interior plastering: 8%
[*]after screed: 7%
[*]after start of tiling works: 7%
[*]after handover of the construction work: 5%

What is your impression? How could this payment schedule be improved? (I don’t just want to say "it doesn’t fit," but I have to specify exactly how it should be from my point of view.)

Thank you in advance!

Olm

Good evening,

What is your impression? How could this payment plan be improved? (I don’t just want to say "it doesn’t fit," but I do have to specify concretely how it should be from my point of view.)

What makes the offer so interesting that you even got as far as the payment plan? Because I don’t think you can change it much.

And no – I wouldn’t sign it; what will you do if, after the completed shell construction, the worst case occurs?

Rhine greetings

Hello construction expert!

What makes the offer so interesting that you even got as far as the payment plan? I don't think you can change much about it.

We know several people who have built with them and/or now live in one of their houses. Very solid, good work. It is a medium-sized family business in the second or third generation, working exclusively with local craftsmen – so no construction crews traveling 400 km who don't care because they have no reputation to lose locally. They deal much better, more openly, and more creatively with our wishes and otherwise also make a very good impression.

How do you think the payment plan should be changed so that it is fair for us? (You are probably right that they are unlikely to completely overhaul it and add a lot of new points – but I do think they are quite open to shifts and maybe 1 or 2 new items.)

Hello,

We know several people who have built with them and/or now live in one of their houses. Very solid, good work. It is a medium-sized family business in the second or third generation, working exclusively with local craftsmen – so no construction crews traveling 400 km and not caring about anything because they have no reputation to lose locally. They handle our wishes much better, more openly, and more creatively and otherwise make a very good impression.

That may all be true. I also quite understand that a builder wants to protect themselves from – let's say – unpredictable customers. But this payment schedule is surely offered under the guise of the real estate agent and developer ordinance, but balanced it is not.

How do you think the payment schedule should be changed to be fair for us? (You are probably right that they won’t completely revise it and add a lot of new points – but I do quite think they are open to shifts and maybe one or two new items.

For example like this, so that it is fair for "both" sides:

6% - upon submission of the building application
6% - upon issuance of the building permit
10% - after completion of the basement floor/slab
10% - after completion of the ground floor walls
10% - after completion of the ground floor ceiling
5% - after setting up the roof truss
5% - after roofing
5% - after installation of windows/glass
10% - after rough installation of electricity, plumbing, heating
7% - after completion of interior plaster
10% - after application of exterior plaster or cladding
10% - after fine installation of electricity and heating, stairs
4% - after installation of tiles, interior doors
2% - after handover or acceptance, at the latest before use of
the property by the client

You should have paid at most between 57 and 60% at the stage of a closed shell.

Best regards from the Rhineland

6% - according to the building application template
6% - upon issuance of the building permit
10% - after completion of the basement floor/slab
10% - after completion of the ground floor walls
10% - after completion of the ground floor ceiling
5% - after erecting the roof truss
5% - after roof covering
5% - after installation of windows/glass
10% - after rough installation of electrical, plumbing, heating
7% - after completion of interior plaster
10% - after application of exterior plaster or cladding
10% - after final installation of electrical and heating, stairs
4% - after installation of tiles, interior doors
2% - after handover or acceptance, at the latest before use of the
building by the client

From this I deduce that at least the first 3 items up to the ground floor ceiling are fine. Significant deviations occur with the roof and windows, where we are paying 18% too much. However, they have omitted the three major items "after rough installation of electrical, plumbing, heating," cladding, and "after final installation of electrical and heating, stairs," but included the screed.

That means with a few changes I would arrive at the following payment schedule (changed/new items in bold, the previous ones that fit in normal font):

after building application: 5%
after floor slab: 15%
after ground floor ceiling: 20%
after erecting the roof truss: 5%
after roof covering: 5%
after window installation: 5%
after rough installation of electrical, plumbing, heating, ventilation: 10%
after interior plaster: 8%
after screed: 5%
after final installation of electrical, heating and ventilation, stairs: 10%
after start of tiling work: 7%
after handover of construction services: 5%

For us, it’s not about the last percent here, but especially about not overpaying so dramatically that it becomes threatening to our existence.