Payment schedule for an extension

psd99

psd99

psd99

Soldato
Joined
7 Sep 2008
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Hey all,

Looking to get an extension done soon.

I'd rather make payments after each stage has completed and not weekly payments because the work might not go ahead as planned.

Can anyone suggest a payment schedule to the builder/contractor during each stage of the build?
 
I recently built/had built (i did a lot of it) a reasonably large extension.

I split the job into sections and paid on completion of each agreed "job".

Mine were:

  • Ground works including drainage and foundations - Payment on acceptable sign off from building control and testing of drainage and inspection by myself.
  • Wall structure (inner and outer skin with insulation installed between) - Payment on sign off from building control and inspection and measurements by myself.
  • Roof structure - Payment on sign off from building control and inspection by myself.
  • Roof tiling - Payment on sign off by building control and inspection by myself.
 
Why would you be making weekly payments?

Stage payments based on percentage complete. Usually 3 max.

If the builder requests money up front to pay for materials, consider paying for material directly with the supplier. Not all small builders will have accounts with building firms but most should. Some lose them after poor payment/credit history.

The builder I will be using next year requires nothing until the job is complete on domestic projects. I had a number of quotes and the good ones with loads of references did not require anything until at least 50% completion.

I have a friend who is a builder, nice guy, good work but he always requires 50% up front on extensions unless you buy the materials as he doesn't have the turnover or cash flow to facilitate. I only use him on small jobs as with mates rates, it's more difficult to hold to account if running slow etc like I would an independent.
 
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if hes any good he will sort it out with you before they start

both myself and a girl at work are both having work done at the same time

I used a builder who had been in the trade 40 years, she used a much younger contractor

my builder was a lot more relaxed about the money..he didnt ask for a penny until about 2 weeks in..then he wanted 25%

he then asked for another 25% when actual walls built, roof finished, doors and windows fitted

he then got the remainder when plastering was complete, floor down, heating and electrics finished ( as well as other sundries, I asked for a new rear boundary wall, rear gates, some additional exterior lighting after they started and he just factored it into the end payment..but basically when all works complete)

the girl at work getting hers built , their builder asked for 50% as soon as they had broken ground for the foundations

I can only assume my much older and longer established builder had much better lines of credit with builders merchants and suppliers...he is also very busy with other projects happening at the same time as well as general maintenance lads so probably has cash flow all of the time..as it happens there has been no snagging problems at all and I have asked him back to fit some full height bespoke shelving as he is a joiner by trade and he did some lovely rear gates for me
 
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Our extension was broken down into 5 stage completion payments similar to Jez above.

What I would say for a large job such as an extension which could significantly impact your family if there were problems I would avoid any builder that cannot float their own business and requires cash up front.
 
The reason i broke it down into the specific "jobs" as opposed to percentage, or time based, or whatever, was that each job is not useless on its own and is a worthwhile job to have completed and signed off by LABC in its own right. Therefore if the builder got annoyed and walked off at any point, i would have no pursual at any stage - they would have completed the discrete elements paid for and i would be free to crack on with another contractor with no hassle.
 
1/3 - upon delivery of the materials and job starting - i made sure the builder ordered the materials but I paid directly to the supplier for them so they were mine incase of any issues.

1/3 - upon ground work completed and water tight

1/3 - on final completion and sign off by building control/planning etc.

That's the way I did mine.
 
you should think about holding a 5-10% retention for 6 months after the project is complete for snagging issues - means the contractor is much more likely to come back and if they don't you have some cash to pay someone else to sort out the problems...
Are you using any form of contract for the works?
 
Along the lines of
- Foundations + below ground drainage (35%)
- Walls and roof structure (35%)
- Internal and external finishes (25%)
- (retention 5%)
 
Aligned to BC sign-off schedule is the norm.

I'm always amazed that people get into those pickles having given massive lump sums to builders before anything has been inspected. Madness.
 
We only made one stage payment on our last piece of work and that was after about a month and a half of work when the builder needed some cash flow to pay his lads etc. The stage payment we made was considerably less than the value of materials already onsite.
 
Up to dpc
Up to plate
Up to ridge
Internals
Finals

If you're mucking around with retention you should really have a Minor Works Contract.
 
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