Construction Payments
A construction draw schedule explains when a builder requests payment as work progresses. Before approving a draw, homeowners should understand what the request covers, how progress is documented, and which questions remain open.
What Is a Construction Draw Schedule?
A construction draw schedule divides the project price into a series of payments tied to defined stages, dates, costs, or milestones. Instead of paying the entire construction amount at once, funds are released over the course of the project.
Draw schedules vary based on the contract, financing arrangement, builder, and project type. A custom home financed by a construction lender may have a different process from a privately funded renovation.
Quick Answer
Before approving a draw, compare the request with the contract, payment schedule, documented work, approved change orders, and any lender requirements. If the information does not align, pause and request clarification.
Why Draw Review Matters
Each payment changes the project’s financial position. A well-documented review helps the homeowner understand what has been billed, what remains, and whether recent changes are reflected consistently.
The purpose is not to withhold payment without cause. It is to make sure the homeowner understands the request and follows the agreed approval process.
Seven Items to Review Before Approving a Draw
1. The Contract and Payment Schedule
Confirm that the amount and timing match the signed agreement. If the request uses a different milestone or percentage, ask why.
2. The Work Associated With the Request
Identify the specific work, materials, or project phase covered by the draw. Broad descriptions such as “project progress” may not provide enough information for a meaningful review.
3. Supporting Documentation
Depending on the project, supporting information may include invoices, a schedule of values, progress reports, photographs, approved selections, delivery records, or lender inspection documentation.
4. Approved Change Orders
Compare billed changes with written change orders. Check the price, approval date, description, and any effect on the schedule.
5. Allowance Activity
If selections are being charged against allowances, request an updated comparison showing the original allowance, committed cost, billed amount, and remaining balance.
6. Retainage or Holdback Terms
Some agreements or lending arrangements hold back a portion of payment until later milestones. Confirm whether retainage applies and how it is calculated.
7. The Remaining Budget
Look beyond the current payment. Compare the amount paid to date, approved changes, remaining contract balance, unresolved selections, and known upcoming decisions.
Example
A draw request includes cabinetry, but the cabinets are not yet installed. That does not automatically make the request improper—materials may have been fabricated, stored, or paid for under the agreement. The homeowner should ask what the charge represents, where the materials are, and what documentation supports the request.
Questions to Ask When a Draw Is Unclear
- Which contract milestone supports this request?
- What work or materials are included?
- Which approved change orders are reflected?
- Are any deposits or stored materials included?
- How much remains in each allowance?
- Does this request affect the projected final cost?
- What documentation is available for review?
Important Scope Boundary
A homeowner’s representative can help organize draw information and identify questions, but does not provide legal advice, certify construction completion, perform a lender inspection, or replace the architect, engineer, licensed inspector, attorney, lender, or other professional responsible for decisions within their scope.
Draw Review Checklist
- ✓ Request matches the agreed payment process
- ✓ Work or materials are clearly identified
- ✓ Supporting documents have been reviewed
- ✓ Change orders are written and approved
- ✓ Allowance activity is updated
- ✓ Remaining budget is understood
- ✓ Open questions are documented before approval
Frequently Asked Questions
Should a draw be approved based only on a percentage of completion?
The appropriate basis depends on the agreement and financing requirements. Ask how the percentage was calculated and what documentation supports it.
What if a draw includes work that is not complete?
Request clarification before approving it. The charge may relate to deposits, fabrication, stored materials, or a contract milestone, but the reason should be documented.
Can change orders appear in a draw request?
Yes, when handled according to the agreement. Compare the request with the written, approved change order and confirm how it affects the remaining budget.
Final Thoughts
A construction draw is more than an invoice. It is a checkpoint for understanding project progress, approved changes, allowance activity, and the financial path ahead.
As The Homeowner’s Representative™, RCC helps Metro Atlanta homeowners organize construction payment information, identify areas that need clarification, and prepare for informed project decisions.
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