Glossary
The words that appear in quotes, contracts and payment schedules, each defined in a few plain sentences.
Missing a term? Email hello@renopay.co.uk.
Milestone-based payment protection
Milestone-based payment protection is a way of paying for building work where the project is split into stages, the homeowner funds each stage before it starts, the money is held securely, and it is released to the builder when the homeowner approves the completed stage. Neither side pays or works ahead of the other. Renopay provides the platform for this arrangement on UK home renovations.
Milestone
A milestone is a defined stage of work with its own scope and price, used as the point at which a payment becomes due. Typical milestones are groundworks, a weathertight shell, first fix, second fix and completion. A good milestone can be checked by looking at the work: the roof is on, the plaster is finished, the certificates are issued.
Stage payments
Stage payments are instalments paid as each agreed stage of building work is completed, instead of a large deposit at the start and a final bill at the end. They are the standard way UK domestic building work is paid for. Written well, each stage names the work that triggers the payment, so both sides know what is being paid for.
Payment schedule
A payment schedule is the written list of stages, the work each stage includes, and the amount due when each stage is done. It belongs in the contract or the quote. A schedule tied to visible progress protects both sides; one tied to calendar dates protects neither. Our free generator builds one for your project.
Payment schedule generatorSchedule templates by project type
Deposit
A deposit is money paid to the builder before work starts, usually described as covering materials or securing a start date. Once paid, it is in the builder’s hands, and getting it back if the work never starts means pursuing the builder. Published consumer guidance treats small deposits as normal and suggests pushing larger requests down or paying for materials on the supplier invoice instead. Our deposit checker compares a request with that guidance.
Mobilisation payment
A mobilisation payment is an early payment that covers the cost of getting a job started: ordering materials with long lead times, scaffolding, skips and site set-up. It differs from a general deposit because it is tied to named costs. Asking for the supplier invoice and paying that amount is the common-sense version.
Interim payment
An interim payment is any payment made during a project rather than at the end, usually for work completed to date. Under formal contracts such as JCT, a contract administrator values the work done and certifies the interim amount. On smaller jobs the interim payments are simply the stage payments agreed in the schedule.
Retention
A retention is a slice of each payment, typically 5%, that the client holds back as security that the builder will return to fix defects. Half is usually released at practical completion and the rest after the defects period. A funded snagging milestone covers the completion half of that without the builder financing it; defects found after handover remain a matter for the contract’s defects period.
Practical completion
Practical completion is the point at which the work is finished and the space can be used, apart from minor defects still to be put right. It usually triggers the final stage payment, with any snagging amount held until the agreed list is closed. On larger contracts a contract administrator certifies it in writing.
Snagging
Snagging is finding and fixing the minor defects left when building work is substantially complete: paint runs, doors that catch, missing sealant, a socket not fitted. A fair snagging process is one consolidated list, a joint walkthrough, an agreed window to fix items, and written sign-off when they are done.
Defects liability period
A defects liability period, also called a rectification period, is the time after completion during which the builder must return and put right defects that appear. Six or twelve months is typical. In contracts that use a retention, the second half of the retention is released when this period ends.
Final account
The final account is the reconciliation of everything owed at the end of a project: the contract price, plus agreed variations, minus any sums already paid and any agreed deductions. Disputes at this point usually come from variations that were never priced in writing, which is why a variations procedure matters from day one.
Building Regulations completion certificate
A completion certificate is the document issued by building control confirming that notifiable work complies with the Building Regulations, after the final inspection. It is the paperwork a future buyer’s solicitor will ask for, so the final stage payment and the certificate should change hands together.
Scope of works
A scope of works is the itemised description of exactly what the builder will do, referencing drawings and specifications where they exist. It is the foundation of the price, the payment schedule and any later argument about what was included. A good scope lists what is excluded as well as what is in.
Specification
A specification sets out the materials, products and standards the work must meet: which flooring, which brand of boiler, which grade of insulation. Two quotes can only be compared when they price the same specification, which is why a vague line such as "flooring" hides thousands of pounds of difference.
Variation
A variation is any change to the agreed scope after the contract is signed: an extra socket, a different tile, a wall that turned out to need underpinning. Variations should be priced in writing and agreed by both sides before the extra work starts. Unpriced variations are the most common cause of final-bill disputes.
Provisional sum
A provisional sum is an allowance in a quote for work that cannot be priced accurately yet, such as groundworks or drainage that depend on what is found when digging starts. The final cost may be higher or lower. Ask how any overrun is priced, and whether investigation now could turn the allowance into a firm price.
Prime cost sum
A prime cost sum, or PC sum, is an allowance in a quote for items the homeowner has not yet chosen, such as sanitaryware, tiles or kitchen units. If the chosen items cost more than the allowance, the difference is added to the bill. Check whether the allowance is realistic for the quality you expect.
Exclusions
Exclusions are the items a quote states it does not cover: structural steel "by others", electrical work, building control fees, decoration. Each exclusion is a cost you will still pay, just to someone else. Add excluded items back into each quote before comparing totals, and ask for anything missing to be added in writing.
JCT contract
JCT contracts are standard form building contracts published by the Joint Contracts Tribunal. The Minor Works Building Contract suits smaller projects with an architect or surveyor administering it; the Building Contract for a Home Owner/Occupier is the plainer version for projects the homeowner runs directly. Both set out payments, variations and completion.
Proof of funds
Proof of funds is evidence, before work starts, that the money to pay for it exists. On a funded milestone, the builder can see that the money for the stage has been paid in and is held securely before committing labour and materials. It replaces the usual guesswork about whether a client can pay.
Consumer Rights Act 2015
The Consumer Rights Act 2015 requires a trader to carry out a service with reasonable care and skill, within a reasonable time and for a reasonable price where none was agreed. If building work falls short, the homeowner is entitled to have it put right, and if that is not done, to a price reduction. It applies whether or not the contract is written.
Approval
Approving a milestone is the homeowner confirming that the stage is complete as agreed, which releases the payment for it. On Renopay the payout is released as soon as the homeowner approves, and it can take up to a day to reach the builder’s bank account. Approval is of the stage, not the whole project.
Automatic release
Automatic release is what happens when a builder marks a milestone complete and the homeowner neither approves nor raises a dispute within 14 days: the milestone is released automatically, subject to the safeguards in the terms, after notifications and a reminder. It stops a builder being left waiting on silence without removing the homeowner’s chance to object.
Milestone dispute
When a milestone is disputed, only that milestone is paused; the rest of the project can carry on. The two sides have a set period to resolve it between themselves. If they cannot agree, either can ask for an independent RICS chartered surveyor to decide, through expert determination.
Expert determination
Expert determination is a way of settling a dispute by appointing an independent expert, here a RICS chartered surveyor, whose decision both sides agree in advance to accept. It is usually quicker than court and is not arbitration. Each side secures half of the surveyor’s fee when a dispute is escalated, and the surveyor decides who ultimately bears it.
RICS chartered surveyor
A RICS chartered surveyor is a surveyor qualified and regulated by the Royal Institution of Chartered Surveyors, the professional body for the built environment. Building surveyors inspect work, judge whether it meets the specification and put a figure on what any remedy should cost, which is why they are used as independent experts in renovation disputes.
Adjudication
Adjudication is the fast statutory dispute route for construction contracts under the Housing Grants, Construction and Regeneration Act 1996, with a decision in around 28 days. It does not apply to contracts with a residential occupier, so a homeowner and a builder working on that homeowner’s house cannot use it unless their contract provides for it.
Letter before action
A letter before action is a formal written warning that court proceedings will start by a stated date if a debt or dispute is not resolved. It sets out the amount, the basis and a deadline. Where the recipient is an individual, the Pre-Action Protocol for Debt Claims requires prescribed information and 30 days to respond.
Small claims track
The small claims track is the county court route for claims up to £10,000 in England and Wales, designed to be used without a solicitor. Fees are proportionate and legal costs are rarely recoverable. A judgment is not the same as payment: if the other side still does not pay, enforcement is a further step.
Late Payment of Commercial Debts (Interest) Act 1998
The Act lets a business charge statutory interest of 8% above the Bank of England base rate on overdue invoices from another business, plus fixed compensation of £40, £70 or £100 per invoice depending on its size. It does not apply to consumer customers, so a builder’s domestic contracts need their own interest clause.
Electronic money institution
An electronic money institution, or EMI, is a firm authorised by the Financial Conduct Authority to issue electronic money and hold customer money, which it must keep separate from its own money under the safeguarding rules. Client funds are held by OPP, an FCA-authorised electronic money institution. Renopay is a technology platform and never holds client money itself.
Section 75
Section 75 of the Consumer Credit Act 1974 makes a credit card provider jointly liable with the trader for a breach of contract on purchases costing over £100 and up to £30,000, even if only part of the price was paid on the card. It compensates after a loss rather than preventing one, and not every builder accepts cards.
Chargeback
A chargeback is a request to your bank or card provider to reverse a debit or credit card payment, for example when goods or services were not provided. It is a card scheme rule rather than a legal right, has a time limit set by the card scheme, and does not apply to bank transfers or cash.
Insurance-backed guarantee
An insurance-backed guarantee is an insurance policy, usually arranged through a trade scheme, that pays out if the builder cannot honour their own guarantee, most often because the firm has ceased trading. Deposit protection versions insure a deposit against the firm failing before work starts. They compensate after a defined loss and have caps and exclusions.
Build a stage payment schedule for your project, or see how funded milestones work in practice.