What is the normal payment term for renovation?

My contractor's quotation states 45% upon confirmation, 45% progress, 10% upon completion and 6% GST

different contractor has different payment schedule. negotiable in terms of % or RMx amount. but make sense for your case, in my opinion.

upon confirmation, they need deposit/upfront payment. why? they need money to buy material, workers gaji or lock-down the price they got from suppliers earlier when making the quotation.

the in-progress payment, depends on the contactor. if the total work is big, they need 2nd/3rd payment to buy material as well. they dont buy ALL material at one time because it need to order or need space to put at your place. so, they break the material purchases depending on the work breakdown (e.g. if do kitchen, they buy material for kitchen first. later do wiring/hacking, then but the respective material, etc etc). also the money is to pay the contractor staffs.

final 10% is upon completion and inspection by you. there could be fixes or issues with the work. this is where you ask the contractor to rectify whatever needed. perhaps you need to add more work too, here and there. it's normal cuz after seeing the finished job, you have something new in your mind

GST, tak payah cakap.


in my case, my total construction quote was RM9.5k. RM3k upon confirmation of quotation and book the contractor's schedule. he was easily negotiable on the terms and quite cincai on how much i want to pay but he did say, the more is better so that he can get the material fast to complete the reno work. for me, make sense la, i cannot be giving him RM1k just to start work with minimal funding to buy material lor. else he need to keep asking me money every week or so.

i didht have 2nd payment. i only had final payment of RM6.5k (original balance amount). from here, i got the bargaining power cuz i held more money until job complete. then i can inspect the quality and fix whatever needed. i also added few jobs, add few lighting points, power points, etc etc., so it added up to about RM7k for the final payment.

nego with the contractor on the payment schedule, let them know if you have issue on the amount, etc etc.

there is no standard rules lah. it's negotiable between both parties lo. you cannot be too stingy until inhibiting the reno work, right? contractor also cannot be too strict until you cannot get the money on time, right?

Only difference my reno is around RM200K

imagine if the contractor runs way after taken 45%, then im fucked.

then nego with the contractor to have more progressive payment schedule.

like 20+20+20+30+10%


regardless of the %, it's all depends on the trustworthiness of the contractor lo. for bad ones, they can run away anytime or dont even do work or unreachable.

For such a big renovation job, you'd be better off doing proper due-diligence. Payment terms don't really matter as much as compared to what is written below...

https://www.kaodim.com/blog/2015/05/21/top-...takes-to-avoid/
https://www.recomn.com/blog/20-rules-hiring...ia/?hlid=4tM4U1

Good articles, it says nobody should pay more than 25% deposit!

I already nego with my contractor that fellow insist at least 30%.

The terms are important but what's more important is his workers and whether he's responsive.
Anyways, good luck with the major renovation and hope everything proceeds smoothly.