Buying from a Developer: What to Check in the Payment Schedule

Buying from a developer: what to check in the payment schedule 🏗️

A payment schedule is one of the most important attachments when buying a new-build. It sets timing, amounts, currencies and conditions tied to construction milestones — and it reveals potential financial risks.

Why the payment schedule matters ✅

• It defines your payment obligations and helps plan your cash flow.
• It links payments to construction stages — important for risk allocation.
• It shows clauses on indexation, penalties and refund mechanisms.

Key items to verify 👀

1. Payment types: down payment, stage payments, final settlement, additional fees.
2. Dates vs. milestones: clear calendar dates are better than vague phrasing like “upon completion of works”.
3. Currency and payment method: which currency, wire transfer, bank guarantee, escrow, etc.
4. Indexation rules: is the price tied to exchange rates or inflation and how is it calculated.
5. Penalties: consequences of late payments and consequences for the developer’s delay.
6. Guarantees and banking instruments: escrow accounts, letters of credit, or developer guarantees.
7. Link to handover: which stage corresponds to handover and the buyer’s acceptance procedure.

Practical checklist before signing 📋

• Request the schedule in a table with dates, milestones and currency clarified.
• Ask which documents will confirm that a stage is completed (e.g., acts, photos, third-party report).
• Clarify the refund mechanism if construction is delayed or the project is stopped.
• Confirm whether amounts are fixed or subject to indexation and get the formula.

Common contract phrases and what they mean 📌

• “Payment upon signing” — clarify whether this is part of the down payment or an additional fee.
• “Payment after building completion” — ask for measurable completion criteria.
• “Subject to indexation” — request the exact calculation method and triggers.

Red flags to watch for 🚩

• Vague dates or undefined milestones.
• No clear refund or protection mechanism in case of developer default.
• Payments tied to an unstable currency with no buyer protections.
• High penalties for termination while buyer protections are weak.

Negotiation tips and practical examples 🤝

• Link stage payments to objective evidence: signed acts, independent inspection reports, or photographic logs.
• Propose a phased payment linked to certified milestones instead of open-ended dates.
• Request compensation clauses for delayed handover.

Documents to request from the developer 📂

• A detailed payment schedule in a spreadsheet format.
• Proof of land ownership and building permits.
• Samples of stage completion acts or independent inspection reports.
• A clear example of how indexation would be calculated.

Financial tools and their pros/cons 💳

• Developer instalments: convenient but check penalties for early repayment and the size of the down payment (usually expressed as a range).
• Mortgage: ensure the bank’s schedule aligns with the developer’s and ask who covers extra costs if dates shift.
• Escrow or letter of credit: adds protection for buyers but requires bank involvement.

Final recommendations 📝

Treat the payment schedule as a negotiation tool and a risk-management instrument. Don’t accept vague wording — insist on measurable milestones, a clear indexation formula (if any), and a refund/compensation mechanism. If you feel uncertain, get a professional review before you sign.

If you’re looking at properties in Batumi or anywhere in Georgia, our team at BuyHome can review contracts and payment schedules to protect your interests and suggest safer payment structures. Start your search or contact us: https://buyhome.ge/en/search