Payment schedules on a custom estate exist to keep money and work in step. When they are built properly the owner never pays for something that has not been verified, and the builder is never funding the project out of its own working capital. Both failures are expensive, and both are avoidable in drafting.
How should the schedule be structured?
Against a schedule of values that mirrors the scope exhibit, released on verified progress rather than calendar dates, with retainage withheld and lien waivers collected at each draw. Payment schedules tied to dates rather than completed work transfer the owner’s leverage in the first month.
The agreement that carries it is described in construction contracts for high end residential work.
What is paid before construction starts?
Design and engineering fees, survey and geotechnical work, permit and impact fees, and long-lead procurement deposits for items with delivery times measured in months. These are real costs, and payment schedules should show them as a preconstruction phase rather than folding them into the first draw.
Preconstruction payment schedules carry these costs, listed in soft costs in luxury home construction.
How should each draw be sized?
So that the value of completed work always exceeds the money paid. Front-loading, round numbers, and large mobilization payments all break that rule. Well-built payment schedules keep the owner marginally ahead of the builder at every point in the job.
The release mechanics, including escrow, are described in escrow milestone payments.
What is retainage actually for?
To fund completion if the work stops, and to give the punch list commercial weight at the end. The contract should state the percentage, whether it reduces at substantial completion, and exactly what must be delivered before final release.
What has to arrive at handover is listed in warranties and guarantees luxury homeowners should demand, and retainage interacts with lien procedure under Chapter 713 of the Florida Statutes.
How do allowances behave?
An allowance is a placeholder for an undecided selection, and it moves the moment the real product is chosen. Test each one against three selections you would actually accept before signing, because payment schedules built on optimistic allowances look affordable and finish otherwise.
The wider pattern that distorts payment schedules is described in luxury construction cost overruns.
How much contingency, and who holds it?
Two separate pots: a construction contingency for unknowns and an owner reserve for upgrades, each with a stated balance reported monthly. The owner should hold the reserve. Merging them makes every upgrade look like an overrun and hides the real position.
Material and market exposure moves payment schedules, and is covered in protecting your build budget from inflation and price spikes.
What changes when a lender is involved?
The lender’s inspector and draw cycle set the pace, so the contract schedule and the loan schedule must agree on milestones, documentation, and timing. Payment schedules that ignore the lender’s requirements create gaps the builder funds and eventually charges for.
Cross-border banking arrangements are covered in banking, financing, and wire transfer practices.
How do changes affect the schedule of payments?
Every approved change should be added to the schedule of values as its own line, with its own value and its own progress measurement. Absorbing changes into existing lines destroys the audit trail that payment schedules depend on.
The change register that keeps payment schedules straight is described in change order abuse in luxury construction.
How does Kass Construction & Development report it?
Monthly, in writing, with a forecast to completion. Kass Construction & Development is a state-licensed (CGC1529472) boutique luxury builder in East Fort Lauderdale led by Mitch Kass, a licensed general contractor and attorney, with 100+ luxury residences over 25+ years across Broward, Palm Beach, and Miami-Dade, and payment schedules here are reconciled against verified work rather than against the calendar.
A custom build often runs 14 to 24+ months and a high-end renovation often 6 to 14+ months. Contact Kass Construction & Development or call 954-607-4335.
| Stage | What is paid | What must be verified |
|---|---|---|
| Preconstruction | Design, engineering, survey, permits, long-lead deposits | Documented invoices and procurement records |
| Site and foundation | Clearing, groundwork, foundation | Passed inspections and updated schedule of values |
| Structure and envelope | Framing, roof, windows, waterproofing | Dried in, with product approvals on file |
| Rough-ins | Mechanical, electrical, plumbing, low voltage | Inspections passed before concealment |
| Finishes | Millwork, stone, tile, fittings, equipment | Approved mockups and delivered selections |
| Completion | Retainage release and final payment | Punch closed, permits closed, closeout package delivered |
Frequently Asked Questions
What is a schedule of values?
A line by line breakdown of the contract price by work item, used to measure progress and to justify each draw. It should match the scope exhibit exactly.
How often are draws submitted?
Monthly is standard on custom homes. What matters more than frequency is that each draw is measured against completed work and supported by lien waivers.
Should I pay for materials stored off site?
Only with proof of purchase, proof of insurance, evidence of segregation and title, and ideally inspection. Otherwise the payment is unsecured.
What is a conditional lien waiver?
A waiver effective only once payment clears. Conditional waivers are exchanged with the draw and unconditional waivers follow once funds have settled.
How much contingency is enough?
Enough that a discovery does not require a decision about the design. The amount depends on document completeness and site risk, and it should be reported monthly.
Can I withhold payment for defective work?
The contract normally allows a proportionate withholding tied to identified items, with notice. Withholding an entire draw without notice usually breaches the agreement.
When is the final payment made?
After punch closure, final inspections and closed permits, delivery of warranties, manuals, and as-builts, and the final lien waivers.
