How do I structure payment milestones in a builder-buyer agreement?

Payment milestones in a builder-buyer agreement should be structured to align with actual construction progress, such as foundation completion, slab casting, and finishing stages, rather than time-based schedules, to protect buyers from paying ahead of actual work done.

Common Construction-Linked Milestones

• Booking amount and agreement signing, typically 10-20% of total cost.
• Foundation and plinth level completion triggering the next payment tranche.
• Slab casting at various floors, linked incrementally to construction progress.

Final Stage Milestones

• Completion of finishing work such as flooring, plumbing, and electrical fittings.
• Occupancy certificate issuance triggering the final payment installment.
• Possession handover linked to the last remaining balance payment.

What Buyers Should Ensure

• Milestones are verifiable through site visits or progress photographs.
• Payment percentages are reasonable relative to actual construction value completed.
• Agreement includes penalty clauses if milestones are delayed by the builder.

construction-linked payment milestones protect buyers from overpaying relative to actual progress, making this structure preferable over fixed time-based payment schedules.