Builder stage payments explained

What a stage payment usually represents

A stage payment is normally tied to a point in the programme, such as foundations, structural shell, watertight, first fix or practical completion. The value attached to each stage is a matter for the contract between the parties.

• The stage is described in the contract or payment schedule
• The builder reaches that point and asks for the payment
• The customer satisfies themselves that the point has been reached
• Payment is dealt with under the terms the parties agreed

Why stage payments cause disagreements

A stage described in three words leaves room for two honest but different interpretations. A builder may consider 'watertight' reached when the roof covering is on. A homeowner may consider it reached only once windows and external doors are installed and openings are weatherproofed.

Neither party is necessarily being unreasonable. The criteria simply were not written down before the stage became due.

How independent verification helps

Builder Standard is used to define objective criteria for each milestone before the work reaches it, with both parties acknowledging those criteria. When the stage is reached, evidence is submitted and Builder Standard records an independent assessment of whether the agreed criteria appear to have been satisfied.

Builder Standard does not hold, control or release funds, and does not instruct anyone to pay. Payment remains a matter between the parties under their own agreement.

Important

This page is general information about how construction stage payments and independent milestone verification usually work. It is not legal advice, and it is not a statement about your own contract.