Stage payment | Chalkline

A stage payment is a fixed-percentage payment from client to builder due at a named construction milestone. It is the dominant residential payment structure in Australia, distinct from the monthly progress-claim style used on commercial work where the contractor claims for work-in-progress at the end of each month.

The standard HIA New Homes Contract uses six stages:

Deposit (5 to 10%): on contract signing.
Base (15 to 20%): on completion of slab or footings.
Frame (20%): on completion of wall and roof framing.
Lock-up (20 to 25%): on installation of external doors, windows, and external cladding so the site is securable.
Fixing (20%): on completion of fixing trades (cabinets, second-fix carpentry, plumbing, electrical).
Practical completion (10 to 15%): on PCI sign-off.

State law constrains the structure:

NSW: the Home Building Act 1989 caps deposits at 10% and requires a payment schedule for contracts over $20,000. Stage percentages are not prescribed; splits are negotiated and often driven by the client’s lender drawdown.
Victoria: the Domestic Building Contracts Act 1995 section 40 sets statutory maximum stage percentages. Charging above the cap is a contract breach.
Other states: caps and stage rules vary (QBCC, CBS, CBOS). Confirm before signing.

Stage payment differs from a progress claim: the stage payment is the contractual milestone; the progress claim is the invoice mechanism used to demand it (the document the builder serves under the SOPA framework).

The client’s bank typically inspects at each stage before drawdown. The builder’s cash flow risk is the gap between stage completion and bank drawdown, typically 5 to 10 business days. Lender delay does not extend the client’s payment obligation under the contract.

Also known as: progress payment, milestone payment, staged payment.

Category: Contracts / payments / residential construction.

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