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 Final Payment To ID, Is it common to withhold x% of payment?

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mini orchard
post Oct 20 2022, 11:30 AM

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QUOTE(georgeloke @ Oct 20 2022, 11:22 AM)
I am planning to engage an ID who is going to manage everything (i.e. an all-in package). Is it common practice to withhold, say, 5% of the total payment until after the warranty period?

If the warranty is for 12 months, I’ll release the final 5% on month 13. Is this done at all?

Thanks all!

George Loke
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The retention money must be agreed during the initial stage and is a common practise.

This post has been edited by mini orchard: Oct 20 2022, 11:31 AM
mini orchard
post Oct 20 2022, 11:44 AM

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QUOTE(georgeloke @ Oct 20 2022, 11:38 AM)
Thanks guys.

I was wondering if this is common practice, and if it is, what is the usual amount.

Is “retention money” the standard term?
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In all private contracts, terms are negotiable.

The quantum is depending on the total contract sum.

For 100k, 10% is 10k or 15k or even 5k

For 30k, is it may be 3k or 5k

Some only give 3 or 6 months defects warranty.

depending on job done and failure rate.

This post has been edited by mini orchard: Oct 20 2022, 11:46 AM
mini orchard
post Oct 20 2022, 11:57 AM

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QUOTE(pysh @ Oct 20 2022, 11:47 AM)
well i dont think its fair to release final 5% payment on 13th month based on warranty..
warranty works their own way just like you buy anything of the shelf with warranty, you dont pay after the warranty has ended..
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You cannot compare with shelf warranty. Different industry have different ways to deal with warranty or dlp.

Developers also dont get full payment until the dlp is over. There is always a 5% retention sum and buyer get to stay in the property.

Building interfloor by itself dont leak if no one is using the bathroom or kitchen. Only through usage, the defects, if any will appear.

This post has been edited by mini orchard: Oct 20 2022, 12:13 PM
mini orchard
post Oct 20 2022, 12:45 PM

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QUOTE(pysh @ Oct 20 2022, 12:26 PM)
yea but my point is a reliable ID or renovator will not runaway from you if you have any defects.. let the warranty process run its way.
i didnt know developer didnt get full $ from bank before DLP... i thought bank always release full amount to developer after 100% completion.
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You learn something new today. The 5% is at lawyer office as stakeholder.

Dlp is applicable to all developers irrespective reputable or samy ali chong co.

The question is not running away. If he is around and dont want to do it, or delay doing it, how ? Common developers tactics, including mnc developers

This post has been edited by mini orchard: Oct 20 2022, 01:07 PM
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