Design and Construction Progress-Based Payment Schedule

[David B.]

Any feedback on this progressed-based payment schedule for a $450K remodel project?

Should there be more specific milestones like flooring, appliances etc? Possibly withhold a little more for job completion? Maybe 15%.

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2.5% upon commencement of schematic and engineering design ($11,250)

2.5% upon completion of schematic and engineering design ($11,250)

2.5% upon completion of construction drawings ($11,250)

2.5% upon obtaining all necessary approvals of plans ($11,250)

Total: 10% out ($45,000)

5% upon commencement of demolition work ($22,500)

5% upon completion of all demolition work ($22,500)

Total: 20% out ($90,000)

10% upon commencement of foundation work ($45,000)

10% upon completion of all foundation work ($45,000)

Total: 40% out ($180,000)

10% upon commencement of framing work ($45,000)

10% upon completion of all framing work ($45,000)

Total: 60% out ($270,000)

5% upon commencement of plumbing work ($22,500)

5% upon commencement of electrical work ($22,500)

5% upon commencement of insulation work ($22,500)

5% upon commencement of drywall work ($22,500)

5% upon commencement of tile work ($22,500)

5% upon commencement of roof work ($22,500)

Total: 90% out ($405,000)

10% upon completion of customer punch down list and job completion ($45,000)

Total: 100% out ($450,000)

[Will Barnard]

First off, for architectural design / structural engineering / submittal and corrections through city plan check, would that really cost you $45,000? Secondly, in the state of CA, no contractor can legally charge a deposit of more than $1,000 or 10% of the total job cost (whichever is less) so for them to ask for $11,250 upon commencement of design is a violation of the law.

Then they ask for $22,500 at start of demo and another $22,500 at completion of demo. Your demo is $45,000? Appears to be extremely high for a single family remodel. Most of the draws in this appear to be overinflated and have you placing out funds in excess of work completed. Proceed with caution with this contractor. As a licensed contractor in CA, I know these rules and I know draw schedules, this one lacks validity in just about every line item.