Allowances, Change Orders and Payment Milestones

Understand deposits

Factories purchase materials and reserve production capacity before delivery. Confirm deposit protection, refund conditions and what happens if permits or financing fail.

Payment rights should correspond to measurable progress and ownership of materials or completed modules.

Control changes

Once production drawings are released, changes can disrupt multiple trades. Require written pricing, schedule effect and approval before work proceeds.

Distinguish owner changes from corrections needed to meet code or the original contract.

Verify milestones

Consider independent inspection, photographs or certification before large factory payments. Transport and set payments should depend on readiness and documented completion.

Retain enough leverage for deficiencies and closeout where local law permits.

Apply this guide to a real project

For allowances, change orders and payment milestones, create a dated project note tied to the destination address and current drawing revision. Identify the authority, designer, factory or contractor responsible for each unresolved item. Attach the written evidence for ‘When do deposits become non-refundable?’ and ‘Who owns work in progress if the supplier fails?’ rather than recording a verbal assurance.

Before a deposit, production release, shipment or final payment, convert every open question into a named action with an owner and deadline. Keep superseded drawings and decisions in the record so later inspectors, lenders, insurers and future owners can understand why the completed house differs from an early sales plan.

Questions to resolve before proceeding

• When do deposits become non-refundable?
• Who owns work in progress if the supplier fails?
• What evidence supports each payment milestone?
• How are code-required corrections distinguished from owner changes?