Updated
GL-M-09
Glossary · Application and process
Milestone payment - paying for a finished construction stage, not a calendar date
01 / In 30 seconds
The short answer
- What it is
- A scheme of paying in instalments as construction stages are reached
- How to do it properly
- The payment is tied to actual completion, confirmed by a document
- What is risky
- The payment is tied to a calendar date regardless of the actual progress of works
- What to check
- The wording of each stage and what confirms that it has been reached
- Why it matters to you
- A well-drafted schedule is the buyer’s main lever when construction is delayed
02 / In plain words
What Milestone payment means
A milestone payment is a scheme under which the buyer pays not the whole amount at once but in instalments as construction progresses. The logic is simple and sound: the money follows the result rather than being paid in advance for all the works.
The whole difference lies in what the payment is tied to. The right option: the next payment falls due when a specific stage of completion is reached, confirmed by a document or report. The risky option: payments are tied to calendar dates and go out whether construction is progressing or has stalled. Outwardly the schedules look similar, but in substance they protect different parties.
Hence the practical rule: in the contract you look not at the percentages but at the wording. What exactly counts as reaching a stage, who confirms it, what happens in the event of delay, and whether the buyer has the right to suspend payments. A properly drafted schedule is the buyer’s main, and often only, lever if construction starts to fall behind.
A case from practice
In one contract, payments were tied to the calendar: construction was falling behind, but the money went out on schedule. In another, they were tied to confirmed stages of completion, and when there was a delay the buyer simply did not pay the next instalment. The difference lay in the wording, not in the percentage.
Where the scheme is used
- Buying off-plan
- A contract with a developer
- Turnkey renovation and finishing
- A large construction contract for a project
- An investment for a Golden Visa
- Staged financing
03 / What it covers
What is looked at in the schedule
Stages
- The wording of each stage
- What confirms it
- Who certifies it
Payments
- The size of each instalment
- Payment deadlines
- Currency and bank details
Delays
- The right to suspend payment
- The developer’s liability
- Termination terms
Protection
- Escrow or a dedicated account
- Guarantees
- Refund procedure
04 / How it works
How it should work
Agreeing the schedule in the contract
Stages, documents and delay consequences in the contract.
Confirmation that a stage is complete
A document or report confirming the stage is complete.
Payment for the stage
Payment only after confirmation.
Monitoring the next stage
We monitor the timing and quality of the next stage.
Final payment and handover
The final payment on acceptance and handover of keys.
05 / Key facts
What you need to know
01What it is
Paying in instalments
The buyer pays as construction progresses: money follows results.
02The right way
Tied to completion
A payment falls due when the stage is confirmed by a document or report.
03The risky way
Tied to dates
Money goes out on schedule even if construction has stopped.
04The buyer's leverage
The right to suspend
A sound schedule and the right to suspend payments are the main protection against delays.
Common mistakes
Paying on dates with no link to construction
Tie each payment to a confirmed stage.
Not stating how a stage is proven
Name the document and who certifies completion.
Paying ahead for a discount
Ask for a bank guarantee or escrow for any advance.
Paying the developer directly
Use escrow or a dedicated account.
06 / Expert advice
How to prepare in advance
The payment schedule is reviewed with a lawyer before signing: how each stage is worded, what confirms that it has been reached, what happens in the event of delay and whether there is a right to suspend payments. The payment arrangement is checked separately — through escrow or a dedicated account it is considerably safer than direct transfers to the developer.
What we do for you. When buying properties under construction, we review the payment schedule line by line: what each instalment is tied to and what protects you in the event of delay. It is the clause of the contract that decides more than the final price.
Igor VentsHead of real estate, Title Deed and property checks
07 / Questions
Frequently asked questions
A scheme under which the buyer pays in instalments as construction progresses, rather than the whole amount at once.
To actual completion of a stage, confirmed by a document. Tying it to calendar dates protects the developer, not the buyer.
Only if this right is set out in the contract. That is why this clause is agreed before signing, not at the moment of delay.
With caution. Early payment deprives you of leverage over the developer, and a discount rarely compensates for this risk.
Through payment via escrow or a dedicated account, where such a scheme is available in the country, and through clear refund terms in the contract.
The options depend on the contract: suspending payments, demanding that defects be remedied, termination and a refund. All of this should be set out in advance.
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