Progress Payment Guide
How milestone payments work, when they are due, and what to review before signing a renovation agreement.
Understanding Progress Payments
“Why am I being asked to pay before the project is finished?” This is one of the most common, and completely understandable, questions homeowners ask when starting a remodel. A well-structured payment schedule should give both you and your contractor full transparency on how the project is funded from day one.
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A progress payment is a payment made during a renovation as specific project milestones are reached. Instead of paying the entire cost at the beginning or end, the total project investment is divided into pre-determined portions tied directly to tangible progress on-site.
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Because the contractor has to pay for the project long before the final nail is driven. A major room renovation requires upfront capital for:
Custom cabinets and countertops
Tile and flooring materials
Plumbing and electrical rough-ins
Specialty trades and skilled labor
Building permits, freight and waste disposal
These expenses don’t wait for the final day of construction. Contractors must purchase custom materials and schedule trade partners weeks or months before installation happens. Think of progress payments like fuel for a vehicle: without fuel, the trip stops. As one milestone completes, funding powers the next stage of construction.
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No. Payment schedules vary depending on project scope, custom material lead times, regional standards and local consumer protection laws. Before signing any contract, make sure your payment terms clearly spell out:
Exact amount due: the dollar amount or percentage required at each stage.
Triggering milestone: the specific physical event that makes the payment due, such as cabinets arriving or drywall starting.
Payment methods and terms: how funds are transferred and any grace period.
Change order process: how unexpected jobsite conditions or scope changes affect the schedule.
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Because payments are tied to physical milestones rather than calendar dates, the schedule adapts on its own. If drywall is delayed by two days because of a plumbing inspection, that payment moves back two days too. You only pay when the milestone actually happens.
How Allura’s Payment Schedule Works
For standard full-turnkey renovations, Allura uses a balanced four-stage milestone schedule. Your signed agreement lists the exact milestones for your project.
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Due at agreement approval and order placement. This is when your materials are ordered and your design is finalized.
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Due when drywall installation begins.
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Due when countertop installation begins.
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Due at substantial completion and the final walkthrough.
Example: A $60,000 Kitchen Renovation
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Jan 1, agreement approval: initial deposit of $19,200 (32%). Materials are ordered and the design is finalized.
April 1, project start: on-site demolition and rough-ins begin. No payment is due.
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April 9, drywall begins: first progress payment of $19,200 (32%).
April 23, countertops begin: countertop template and installation start, with the second progress payment of $19,200 (32%).
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May 7, project completion: the final punch list is complete and the final payment of $2,400 (4%) is due.
Not every project involves drywall or countertops, such as a cabinet-only replacement or custom trim work. For those projects, Allura uses equivalent milestones tailored to your scope.
Evaluating Deposits and Red Flags
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Not necessarily. It depends on how much of your project is materials. Consider a project with $10,000 in custom materials and $2,000 in labor ($12,000 total). A deposit of 50% or more is reasonable there, because the contractor has to order non-refundable custom cabinetry and stone before stepping foot on-site. A labor-heavy project with few materials should not need a large upfront deposit.
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Never. A written agreement protects both parties and creates a clear record of expectations. At a minimum, your contract should state:
Total project cost and itemized scope of work
The milestone that triggers each payment
Included and excluded materials
Warranty policies and cancellation terms
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It sounds appealing, but be careful on major projects. A contractor who takes on a multi-week, high-dollar project with no funding along the way may be stretching their cash flow or cutting corners on what they pay subcontractors. Paying at completion makes sense for small handyman repairs. For major remodels, progress payments keep the project moving.
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“What exact physical event triggers each progress payment?”
“What portion of my deposit goes toward ordering custom, non-refundable materials?”
“How are unexpected hidden repairs, like water damage behind walls, documented and billed?”
“What defines final project completion before I release my last payment?”
Pro Tip
Remodeling is a partnership. Clear, respectful communication about money keeps the project moving and stress low, and texts and emails can sound harsher than intended. Try something like: “Hi [Builder Name], thanks for sending over the invoice. I’ll review it and process the payment as soon as we hit the drywall milestone in our agreement later this week. Thanks!”
Have Questions About Your Renovation?
At Allura Bath & Kitchen, we believe full financial clarity builds peace of mind before construction begins. Contact us with questions about a milestone, invoice or payment timing.
