Renovation Fee Payment Schedule

Hello,


I contacted a few contractors and I've been given different payment schedule for the renovation. A couple said we pay 1/3, 1/3, 1/3 of the cost at the beginning, middle, and end of the renovation period. Some said 50%, 40%, 10%.


Does anyone know what the norm is ? Thanks.

It largely depends what the raw materials are as a % of total cost.



For example, if they need to import a lot of luxury kitchen units that will only fit your place or import bizarrely coloured sanitary ware, they will want more up front to make sure they don't end up out of pocket if you default and they end up with unsaleable kit on their hands.



If they're just painting and sticking in some new water pipes and knocking up some cheapy MDF units, they don't need so much up front as their raw materials cost is negligible.



When we had an investment property repainted and cosmetically repaired, we agreed on 30-40-30. But when we later used the same contractor for our own home (with a lot of bespoke imported kit), he wanted 60-10-20.



If you're a novice at these things, do take some independent advice (on a fee basis) about what will add value. I recently viewed a beautifully renovated place fully kitted out with top-of-the-range fixtures. It was failing to sell at the price realised by an identical but completely unmodernised apartment two floors lower. I couldn't understand it. But the agent explained that virtually no gweilo looked at that building, and the Chinese thought the renovation was "weird" (no gas burner large enough for a wok; never seen a bidet before, etc).

Keep at least 10% back for defects...give them at least a 1, best, 3 month defect period.