Construction Payment Schedule: When and How Much to Pay Your Builder

2026-10-08

The one thing to grasp before your first payment: by law, in Ukraine you pay for construction AFTER the work is handed over, not before it. That is not a theory — it is Article 854 of the Civil Code. A deposit, an advance "for materials," "pay 50% so we can start," "pay it all up front and get a discount" — none of that is your obligation. It is a concession you choose to make, at your own risk. Below is what a payment schedule looks like when it leaves you with neither an empty account nor an abandoned site.

Why this matters. The stakes are not a bathroom renovation. The shell of a single-storey 200 m² house in 2026 runs about $395 per square metre — roughly $77,000 for foundation, walls and roof alone, with no windows, heating or finishing (novyny.live, 2026). Turnkey, the market asks somewhere between $400 and $950 per metre. When you hand half of that to someone you have known for two weeks, the payment schedule stops being a formality and becomes the question of whether you end up with a house or with a lawsuit.

What the law says — and why it is on your side

Your starting position is strong. Article 854 of the Civil Code states that, unless the contract provides for prepayment, the client pays after final handover — provided the work was done properly and on time. And the contractor may demand an advance ONLY where the contract expressly says so, and only in the amount the contract names. No advance clause, no obligation to pay one.

For consumer contracts (and a house built for your own use is exactly that), Article 873 applies: the work is paid for after final delivery, and any advance or full prepayment is possible only with your consent. The law does not force you to pay up front at all. Any prepayment is a decision you make — not a duty imposed on you.

By default the law puts you in the stronger position: you pay for what is done. A large prepayment is you handing that position away voluntarily, in exchange for a promise.

From this comes the principle the whole sensible schedule rests on: money follows the result, it does not run ahead of it. The contractor completes a stage, you accept and inspect it — then you pay for that stage and for starting the next. Not the other way round.

The main mistake — paying by the calendar, not by the result

The most common scheme on offer: "50% deposit, the rest on completion." Or the softer version, "an advance to buy materials." It sounds reasonable — the builder has to buy brick with something. The problem is not the advance itself but its size and what it is tied to.

Once you have handed over half the money up front, the balance of power flips. Now the contractor is building with your money and is in no hurry: he already has what he wanted, and you are tied in, because you cannot claw an advance back without a court. The one lever you had — the ability to stop paying if work stalls or goes wrong — is gone. A big advance does not speed construction up. It removes the contractor's reason to finish it.

The second trap is a payment tied to a date rather than to volume. "We pay on the 20th each month" is convenient for the contractor and dangerous for you, because the money leaves regardless of how much was actually built. A healthy schedule ties every tranche not to the calendar but to a specific, completed and accepted stage.

A healthy payment schedule: each tranche against an accepted stage

A working schedule splits payment into parts, and each part is paid once the matching stage is accepted. The percentages below are a practical guideline, not a legal norm — the exact figures depend on the project and the contract. But the logic of the sequence is fixed:

Start and mobilisation — a small advance. A sensible ceiling is around 10%, not 50%. It covers setting up the site and the first batch of materials, not "the whole house in advance."
Foundation — paid after the foundation is done and accepted. By then you have already seen how the contractor works, and have not yet risked a large sum.
Shell — walls and floors — paid after the volume is accepted. This is the costliest stage, and precisely where it matters to pay for work done, not promised.
Weathertight shell — roof and windows — paid after installation. A house under roof and glazed is the first clear point where the result is visible.
First-fix services — electrics, water, drainage, heating in the screed — after the concealed works are accepted (they are accepted before they are closed up).
Finishing — in smaller staged payments, because the work is extensive and spread over time.
Final payment and retention — 5–10% of the sum, held back until every defect is fixed after handover. This is your last lever; do not release it early.

The point is single: you never pay for a stage you cannot yet see, and never pay so far ahead that you lose the ability to stop without heavy loss. At each step, the amount you have already paid roughly equals the value of what is built — no more.

Advance for materials — where the reasonable line runs

An advance for materials is fine if it is tied to a specific stage and backed by documents. "Give me 300,000 for materials" with no breakdown — no. "Here is an invoice for brick and block for the shell; pay the supplier directly, or advance against this invoice" — yes. The difference is that in the second case the money is tied to a visible purchase, not vanishing into a common pot.

Two practical safeguards. First, pay for materials on delivery, against delivery notes, rather than in one large "for everything" payment — so you are not financing the contractor months ahead. Second, write in that materials you have paid for are your property from the moment of payment. If the contractor disappears, the materials on site stay yours, not a matter of dispute.

The final payment and retention

The biggest mistake at the finish is paying 100% on the day the contractor says "done." Done and accepted without remarks are different things. That is why the schedule builds in retention: 5–10% of the sum that the client holds back after handover, for an agreed period or until identified defects are fixed.

This is not mistrust but a standard mechanism. As long as the last payment hangs over the contractor, he has a reason to come back and fix what surfaces after handover: a crack in the screed, a door that will not close, a leak at the first rain. Pay everything at once and he has nothing left to come back for. Warranty obligations should be a separate clause in the contract, with a clear term.

What to put in the contract so the schedule works

A payment schedule lives in the contract and its annex, not in a verbal understanding. Without that, none of the above is worth anything. What must be fixed:

Each payment is tied to an acceptance certificate for a specific stage, not to a date. No signed certificate, no payment.
The full price and the conditions under which it may change. A fixed budget, or a ±10% corridor, protects you from "it turned out more expensive" mid-build.
Who records the completed volume, and how. Best of all — an independent technical supervisor, not the contractor reporting on his own work.
The client's right to suspend payment if the work departs from the design or stalls. Without this clause you cannot lawfully hit pause.
The schedule itself, as a separate annex: the list of stages, the sum or percentage for each, and the payment condition (after acceptance).

One detail that is often skipped: the volume of completed work must be recorded by someone independent of the contractor. When the contractor decides for himself that a stage is "80% ready" and issues his own invoice, the schedule becomes a fiction. That is why technical supervision is not an added cost but the condition under which a payment schedule means anything at all.

A real example: why 10% versus 50% is tens of thousands of dollars

Take a real catalogue project. KT-151 is a single-storey 155 m² house. Turnkey, at market prices, that is roughly $90,000–140,000 depending on finish level. A "10%" advance on such a house is $9,000–14,000. The "50%" advance so many like to ask for is $45,000–70,000. The gap between the two approaches on one house is tens of thousands of dollars that either move along with the work or sit in someone else's pocket from week one.

For a larger house — say KT-263 at 208 m² — the figures bite harder still. This is exactly why the advance ceiling is no small matter: at the scale of a private house, every 10% paid ahead is a sum that in other contexts buys a car. A payment schedule is the tool that keeps that sum under your control for as long as possible.

Three red flags in a payment schedule

There are three signs that mark a bad schedule at the negotiation stage — before you have signed or paid anything. If you see even one, it is a reason to stop and renegotiate, not to wave it through.

A deposit above 20–30%. The larger the advance demanded, the less working capital the contractor has of his own — and the more of the risk is yours. 50% up front is almost always a sign of money trouble, not of confidence.
Payments tied to dates, not stages. "You pay on the 1st and the 15th" means money leaves by the calendar regardless of what was built. It should be tied to accepted volume, not to a number on the calendar.
No written schedule at all. "We'll sort it out as we go" is the worst option: with no fixed schedule, every next payment becomes a matter of pressure and improvisation — never in your favour.

A fourth, less obvious flag is a contractor who resists independent supervision. Someone with nothing to hide is relaxed about a third party checking the volume. Resistance here is almost always about wanting to decide for himself when a stage is "done" and when to issue the invoice.

How DOMRIY approaches this

We stand on the client's side, so our payment schedule is tied to accepted stages — not to the calendar or to a large advance up front. You pay for what is already done and checked, and at every step you can see where the money went. The estimate is a separate stage after the project, with a breakdown — not "name a figure and bring half." And it all starts with a free site visit: we come out, fill in the brief and show you a plan of works — before any payment is even discussed.

If you are choosing a plot or already preparing to build, book a free site visit. We will look together at what can realistically go on it and draw up a transparent plan, with no obligation on your part.

Questions and answers

What counts as a normal advance?

A guideline is up to 10% for the start and site mobilisation. That is money for setup and the first batch of materials, no more. When someone asks for 30–50% up front "to begin," it signals that the contractor is short of working capital and plans to build with your money. By law (Art. 854 of the Civil Code) you are not obliged to give an advance at all unless the contract provides for one.

Is it worth paying 100% up front for a discount?

No. No discount makes up for the loss of control. Having paid everything in advance, you are left with no leverage: if the work stalls or goes wrong, recovering the money means a court case lasting years. A "full-prepayment discount" is a charge for your risk, not a gift.

Who should buy the materials — me or the contractor?

It depends on the contract; both work. The key: if you give an advance for materials, it must be tied to a specific stage and backed by invoices or delivery notes, not one lump "for everything." And write in that materials you have paid for are your property from the moment of payment.

What is retention and how much is it?

It is 5–10% of the sum that you hold back after accepting the work — until every defect is fixed, or for an agreed warranty period. As long as this payment hangs over the contractor, he has a reason to return and fix what surfaced after handover. It should be a separate clause in the contract.

What if the contractor insists on a large advance?

Treat it as a diagnosis. A reliable contractor with working capital is comfortable working to a "payment on accepted stage" schedule. One who demands 50% up front either has money problems or is used to shifting the risk onto the client. The law is on your side: without a clause in the contract, an advance is not mandatory. If a contractor will not build without a large prepayment, that is the cheapest possible reason not to start with him.

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