Developer Payment Schedules: Deposits, Instalments and the Final Payment

A payment schedule sets out when and how much you pay the developer, from reserving a flat to taking it over. For new builds, payment usually happens in several steps: a reservation fee, instalments under the contract, and a final payment on handover or on transfer of ownership. The details differ from project to project, so what matters is the text of the contract, not verbal assurances from the sales office.

What payments make up the schedule

Most developers use similar building blocks, but name and order them differently. Before you sign anything, ask for the schedule in writing and make sure you understand what each payment means.

• Reservation fee – paid in return for the developer holding the unit for you while the contract is negotiated. Ask whether it counts towards the purchase price and under what conditions it is refunded.
• Deposits and instalments during construction – partial payments tied to a date or to the completion of construction stages.
• Final payment – the remaining part of the price, paid on handover of the flat or on transfer of ownership.

In general, the larger the share of the price you pay before the building is finished, the more it matters how your position is protected if construction stops or is delayed.

How instalments can be linked

Instalments are most often tied to one of two principles. Each has different consequences for the buyer.

To calendar dates

Payments fall on fixed dates, for example quarterly. The advantage is predictability; the disadvantage is that you pay even when construction is behind schedule.

To construction stages

An instalment is paid once a certain milestone is reached, for example completion of the structural shell or closing of the building envelope. This is generally more favourable for the buyer, because the payment reflects actual progress. Check who confirms the stage and how this is documented. Independent confirmation, for example from a construction supervisor, is best, rather than just an announcement by the developer.

What to focus on in the contract

The payment schedule is only one part of the document. Have a lawyer review the contract for a future purchase contract, or whatever other type of contract the developer uses, ideally before you pay the reservation fee. Check these points in particular:

1. Which account you pay into. Find out whether it is the developer's ordinary account, or a special account, or a lawyer's or notary's escrow. Escrow usually gives the buyer greater security.
2. What happens if construction is delayed. Does the buyer have the right to withdraw and get the money paid back? Are there contractual penalties, and in what form?
3. What happens if your payment is late. Check the deadlines, penalties and the conditions under which the developer may withdraw.
4. How defects are handled on handover. Find out whether you can withhold part of the final payment until minor defects are fixed, and how this is described in the contract.
5. Whether the price can change. Check under what conditions the price may be adjusted and what the contract states as fixed.

Always assess the specific amounts and the legal terms of buyer protection with a professional. This text is a general overview, not legal advice.

How the schedule links to financing

If you are buying with a mortgage, the payment schedule has to fit with the way the bank releases the money. For new builds, banks often draw the loan gradually, in several parts, and may require documents for each drawdown. The loan may therefore not match the developer's instalments in timing.

In practice this means you may need to pay some instalments from your own funds, and earlier than the bank's money arrives. Before signing, go through with a mortgage specialist whether the developer's schedule and the drawdown timetable match. You can get a rough idea of the monthly burden in the mortgage calculator, but for real terms rely on the offer from a specific bank.

Also consider the period when you are already paying the mortgage but do not yet live in the flat. If you are paying rent at the same time, your total monthly costs will be higher than you might expect.

Practical steps before signing

• Choose projects and compare their terms in the project catalogue. Look at who the developer is and what references they have, which you can also find in the overview of developers.
• Find out whether the seller can show a sample payment schedule before you reserve.
• Draw up your own table: date, amount, purpose of the payment, and where the money will come from.
• Check what stage construction is at and whether the developer holds valid permits.
• Require all agreements in writing, and leave yourself time for a legal review before signing the contract.

You will find more context on the whole process in the buyer's guide. If you would like help with choosing, you can use the housing inquiry form. To compare offers in a specific area, see the overview of locations.

Frequently asked questions

Is the reservation fee refundable?

It depends on the reservation agreement. Some agreements provide for a refund if the final contract or financing cannot be arranged, others do not. Check the terms before paying and have them confirmed in writing.

Can I withhold part of the final payment because of defects?

Some contracts expressly provide for this, others do not. It is good to have this option described in the contract in advance, including how defects are recorded in the handover protocol. Discuss the specific procedure with a lawyer.

What if the bank releases the money later than the developer wants?

This risk is avoided by comparing the instalment dates and the loan drawdown timetable before you sign. Discuss it with the mortgage specialist and with the developer, so that the schedule can be adjusted if necessary, or so that it is clear where you will cover the difference from.