What Are Milestone Payments?
Milestones divide a project into phases, with payment released upon completion of each phase.
Why Use Milestones?
- Reduce financial risk for both parties
- Ensure steady cash flow for contractors
- Provide clear checkpoints for progress
- Make dispute resolution simpler
Typical Milestone Structure
| Milestone | % | Description |
|---|---|---|
| Deposit | 10-20% | Project start, materials |
| Phase 1 | 25-30% | Demolition/framing complete |
| Phase 2 | 25-30% | Rough work complete |
| Phase 3 | 20-25% | Finishing work |
| Final | 10% | Project completion |