A construction drawing schedule is basically what is used by contractors to identify specific completion points for a job. This financial tool allows banks to see progress and then release funds to keep the project moving forward. If a construction schedule is not used, money will not be distributed and the contractor may run out of money for the project, or the money may not be distributed as it should.
There is not just a basic draw schedule for the work, as buyers and the bank must agree on the times at which the money will be released to the contractor. Without these agreed times, the work draw schedule is useless.
The draw points
While there may be dozens of different points of tie, most people like to agree on the minimum. The reason for this is that it saves everyone bureaucracy, while also saving on fees associated with each draw. These fees may seem unnecessary, but they are necessary.
Some of these fees include the external inspector that is always used to ensure that the completion point has definitely been reached, as well as the deposit fee to transfer the money into the account.
As far as the documentation required for sweepstakes, after doing one or two, most people will agree that the fewer sweepstakes there are, the better. For each draw, forms must be filled out with the names of people and companies, the amount requested and the corresponding budget item. Of course, documentation is almost always necessary and must be written, including receipts, invoices and, sometimes, proof of payment.
A pretty standard construction schedule
While not all construction schedules look the same, here is an example of what many look like.
First 20% – This amount is paid when the development of the site, septic tank, water main, installation of skirting and foundation and concrete base of the garage are completed.
Second 20% – The second installment is typically sent when the home is framed, the roof is installed, the windows are installed, and the exterior doors are installed.
Third Party 20% – The third installment includes negotiations completing roughings, exterior siding being installed, insulation is in place, drywall is in place, trim is installed, hardwood floors are installed, and the exterior and first coat the interior paint is on.
Fourth 20% – The project is almost completed when the fourth installment of the construction draw schedule is paid. This amount can only be paid when kitchen cabinets and countertops are installed, plumbing is installed, interior painting is finished, house is trimmed, exterior is completely finished, driveway is installed, drainage is in place , and the handrails are where they need to be.
The Last 20% – This last installment includes all those little details and finishing touches. Some of these include flooring installation, tile work completed, house fully trimmed, appliances installed, garage doors installed and working, landscaping completed, and Certificate of Occupancy issued.
As you can see, there is a lot of work involved in each part of the construction design schedule, but once each section is complete, the money will be available to the contractor.
Problems to Avoid with Construction Schedules
There are so many things noted in construction schedules that it's easy for certain things to slip through the cracks. If you are a buyer, you may not notice some words that will not protect you completely. If you're a contractor, you may want to have the following items on your construction schedules, but be aware that buyers are getting savvier when it comes to reading the fine print. So you might have some issues on your hands when it comes to approving these schedules.
The first thing you should do is avoid vague wording, as this could lead to the money being withdrawn prematurely. Anything that is too vague can be misinterpreted in a number of ways, causing a misunderstanding that can bring the entire project to a halt.
You should never have the words at the beginning anywhere within the construction draw schedule because this means the money will be paid before work begins. While this is great for contractors, it is not in the buyer's best interest.
Never include ties or descriptions of ties that don't make sense. Often this will include separating items when they are normally included in a giveaway.
An initial load draw will always benefit the contractor, but never the buyer, so it should never be included in a construction draw schedule. Some builders will make this less obvious by moving through projects at seemingly breakneck speeds so that they can receive additional draws before previous draws are completed. Work must always be completed in order so that the appropriate amount of money is distributed at the appropriate time.
Duration of construction drawing schedules
Most construction loans are expected to take twelve months to complete, but not all take that long. The construction draw schedule may indicate dates that span the entire year, but this does not mean that the contractor or buyer needs to meet these dates.
If the first percentage is completed before the written date, a tie point may be completed if all guidelines are met. This is the main reason why construction draw schedules have percentages for draw points instead of just dates.
While some issues may arise during construction, not all of these issues may affect the construction schedule since work for each percentage needs to be completed before payment is issued. This is much better than stating that a payment will be issued on a specific date even if the appropriate amount of work is not completed.
It's easy to see why construction schedules are so popular in the construction industry because they protect both the buyer and the contractor. Each person will want to make sure that the construction schedule they have in place will benefit everyone so that the working relationship is kept intact throughout the project.
