A construction payment schedule is the only part of a building contract that decides who holds leverage at each stage of the work. Get it wrong and you spend the rest of the project asking for things rather than requiring them. On a Delhi plot, where four floors go up in a fixed sequence, the schedule can be written with unusual precision because every stage is visible from the street.
This is the version we use on our own sites, and the one we recommend to owners who are building with someone else.
What a construction payment schedule is really controlling
Payments should follow work, not dates. At any point in the project, compare two numbers: the value of work actually standing and verified on site, and the money you have released. If the first is behind the second, the contractor is holding your capital and you have lost the ability to insist on corrections.
That single comparison explains why calendar-based schedules fail. A payment due in March pays for time. A payment due when the third-floor slab is cast pays for a building.
Before the first payment: the Delhi approvals gate
The schedule should not start at mobilisation. It should start at the point where work is legal.
In Delhi, a residential building needs a sanctioned plan from the Municipal Corporation of Delhi, uploaded through the online building permit system by a registered architect or structural engineer. For many residential plots the route is an intimation with an undertaking rather than a full scrutiny, but it is still a filing with the authority, and it is still the owner’s responsibility. Work on an unsanctioned site can be stopped, and work that departs from the sanction can later be ordered removed.
The MCD’s own citizen page sets out the steps and the professionals involved: MCD building sanction services.
Keep the approvals and connections outside the construction contract, on a separate cash-flow sheet:
- building permit processing fee, charged on the built-up area
- structural engineer’s certificate and the as-built drawings
- water and sewer connection charges
- electricity connection and meter
- the completion and occupancy filing at the end
None of these belong in a contractor’s stage bill, and mixing them in is how an “extra” appears halfway through the project.
The stage gates in a construction payment schedule
Percentages are a starting position for negotiation, not a legal standard. No law prescribes this split. What matters is that each release has a physical condition, measurable on site, that a third person could verify without an argument.
| Gate | Share of contract | Released only when |
|---|---|---|
| Mobilisation | 5-10% | Sanction in hand, site handed over, barricades and stores up |
| Excavation and footing | 10-12% | Footings cast to drawing, levels checked, no soil substitutions |
| Plinth | 8-10% | Plinth beam cast, damp course in, filling compacted |
| Each slab | 8-12% per floor | That slab cast, cured, cube results seen, covers recorded |
| Masonry and plaster | 12-15% | Walls to the agreed level, openings true, areas measured |
| Waterproofing | 4-6% | Flood test passed on terraces and wet areas, before tiling |
| Services rough-in | 8-10% | Plumbing pressure test and electrical insulation test recorded |
| Flooring, joinery, painting | 12-15% | Trade complete room by room, measured against drawings |
| Handover | 3-5% | Snag list closed, documents handed over |
| Retention | 5% | Released after the defect liability period |
On a stilt plus three-floor building, the slab gate appears four times, which is good: it spreads money across the project and gives you four natural inspection points.
If the schedule front-loads the first three gates, the contractor is being funded from your side for work he has not yet done. If it delays everything to handover, no contractor with a payroll can accept it. Both are wrong in different directions.
Why a builder floor is not a house
A single house has one kitchen, three bathrooms and one set of finishing decisions. A builder floor has four of each, sharing one staircase, one lift and one stilt.
That changes the payment curve in two ways. Finishing is a much larger share of the total, so it needs more gates, not one. And the shared elements – staircase, lift, stilt, boundary, overhead tank – cannot be left to the end, because the floors above cannot be sold or occupied without them.
Read the schedule with the sale sequence in mind. If the build is funded by selling floors as they complete, the finishing tranches for the upper floors depend on a sale that may not have happened. Either stretch the finishing gates to match the programme, or keep the retention until the last floor is handed over. A schedule that assumes money arrives on demand from a sale is the most common cause of a stalled site.
When there is no cash schedule at all
If the plot owner and the builder have agreed a collaboration, there is no cash flow to schedule. The owner contributes land, the builder funds and builds, and the owner takes an agreed set of floors.
The payment schedule is replaced by a delivery schedule, and it needs the same discipline:
- what the owner is entitled to, room by floor, in carpet area terms
- the dates at which the structure, the finishing and the handover fall due
- what happens if the builder sells a floor before the owner’s floors are handed over
- who pays the permit fee, the connections and the completion filing
- what the owner may withhold, or what security he holds, if the dates slip
Most collaboration disputes we hear about trace back to an area share agreed verbally and a delivery date never written down. The builder collaboration agreement needs the same stage gates as a paid contract, expressed in floors and dates rather than rupees.
Retention is not a discount
The retention is the only part of the contract that gives the contractor a reason to return after he has been paid for everything else. Five per cent held through a defined defect liability period is normal on residential work in Delhi.
Two conditions make it real. First, the retention must be a percentage of each payment or a stated sum, not a vague promise to “settle at the end”. Second, the release condition must be written: snags closed, water tested through one monsoon, lift and pumps demonstrated. Our note on the defect liability period explains what the contractor is and is not obliged to fix, and for how long.
Do not release retention against an assurance. Release it against a signed snag closure list.
Variations, escalation and the running account
Three things wreck a clean payment schedule, and all three are preventable at the drafting stage.
A variation should be a written instruction with a price and a time effect, approved before the work is done. Verbal upgrades settled later are where the cost goes.
An escalation clause should name the index, the base date and the items it applies to. An open-ended “material prices may change” clause is not a clause, it is a renegotiation.
A running account should be reviewed at every site meeting: contract value, variations approved, billed to date, paid to date, retention held, balance. One page, updated. If the contractor cannot produce it, the schedule is not being followed, whatever the agreement says.
Every stage should also come with a GST invoice that names the stage as defined in the contract. A single lump-sum bill at the end is a sign the stages exist only on paper.
If a bank or a loan is funding the build
Lenders release construction money against their own stage definitions, not yours, and each release has a verification cycle. A schedule that demands payment faster than the lender releases forces you to bridge from savings or to stall the site.
The fix is structural. Before you sign, take the lender’s stage list and align the contractor’s gates to it. Then keep the evidence each gate needs in the lender’s format: dated photographs, the engineer’s certificate, the measurement sheet. Owners who produce that pack at each stage get disbursements on time; owners who produce a WhatsApp photo do not.
What to check before you sign a construction payment schedule
- Every gate describes a physical state, not a percentage of an abstract stage
- No gate says “structure complete” or “finishing 50 per cent”
- The advance is modest and adjusted against early bills
- The retention is defined and its release condition is written
- Variation and escalation routes are in the contract, not in conversation
- The owner’s statutory costs are listed separately
- The slab gates match the number of floors actually being built
- The final payment is tied to handover of documents, not to the last coat of paint
If a contractor resists inspection gates, that is the answer to a different question. A firm that builds to a schedule welcomes them, because each gate also releases its own money. Our stage-by-stage inspection guide sets out what to look at when each gate comes up.
Where this fits in a purchase
If you are buying a floor rather than building one, the same stages tell you what you are looking at. A floor handed over at the slab stage is a different proposition from one at finishing, and the price asked should reflect the stage, not the brochure.
We build and hand over floors in Vasant Kunj, Vasant Enclave and Nangal Dewat, and we will walk you through the payment schedule on any of our sites before you commit to anything. Speak to us for availability and current stage.
