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Staged payments for a new house build

  • 12-01-2010 6:48pm
    #1
    seclachi
    Closed Accounts Posts: 510 ✭✭✭


    What is the norm for paying a builder in stages while constructing ? I heard that deposits are out these days and that you should pay a larger share towards the end of the project as it is completed ? I have a rough idea of the stages, foundations, walls, roof, plastering, final snagging etc. I intend on going with MHRV, should I have airtightness as one of the payment stages ? How is a builder likely to react to no deposit, would they be outraged or just take it as a sign of the times ?


Comments

  • #2
    Poor Uncle Tom
    Registered Users, Registered Users 2 Posts: 14,547 ✭✭✭✭Poor Uncle Tom


    I have been signing off stage payments for over 20 years and I can safely say I have never signed off a deposit payment for a builder. I would not ever sign off for more then the value of works carried out on the site, even if the materials are on the site for the next stage, I will not sign it off until the stage has been reached. I have seen a lot of builders/construction companies go belly up over the years and I don't ever want my insurance making up the difference for a premature payment.

    But, this is my experience only.


  • #3
    rebelontour
    Registered Users, Registered Users 2 Posts: 40 ✭rebelontour


    we are in the process of building and have just paid the second of 4 payments. under no circumstances would I give a builder a deposit. they just gave me a list of dates and what work would be done at that stage and the money that would be due. This was signed by our architect and solicitor.


  • #4
    mr_edge_to_you
    Registered Users, Registered Users 2 Posts: 3,189 ✭✭✭mr_edge_to_you


    a builder should be able to fund the first stage (at a minimum) of a building project. if they can't do that then they have got cashflow problems and shouldn't be touched!

    the engineer can only sign off and value work that is already completed.

    we have been advised as the build progresses near the end to ask the engineer to sign off as much as possible as the bank withhold the final stage payment subject to the final market valuation of the property.

    our builder specified 5 stages of equal amounts. foundations, wall plate, roof, plastering and completion. we also provided the engineer with details of our window, heating and kitchen costs as these are significant costs which we need to fund with our mortgage.

    the bank have actually questioned the engineer on the last stage for fear that he had overcooked it but after a few emails they gave the all clear.

    make sure you do your homework so that you have a proper cashflow. you don't want to get stuck owing your builder money mid build.


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