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Milestone Payments factsheet

If you're a homeowner repairing your leaky home through the Financial Assistance Package, this factsheet will help you to understand the size and timing of payment contributions.

Milestone payments are based on pre-defined percentages of the total approved costs in your approved payment plan.

Final payment claim fact sheet has information about how to make the final payment.

Milestones vary by type of repair

The repair contributions we pay you will differ according to pre-defined stages of work. These milestone payment arrangements vary according to the type and complexity of a repair.

You need to advise us of your proposed milestones when you submit your payment plan application, once you have decided on your preferred builder’s quote.

The first milestone payment is always for associated costs incurred prior to repairs commencing. These are typically some of your ‘associated’ and other non-construction costs, including:

  • design costs
  • consent fees
  • valuation fee (if applicable)
  • project management costs (if applicable) to date.

The proposed final payment in a payment plan is an estimate only. The actual amount is determined at the time of your final payment claim (once the effect of any changes made during construction is known).

All contributions will be paid to your bank account within 12 days of approval. You pay your contractor(s) according to the agreed invoicing arrangements in your contract with them.

You must ensure you retain all invoices and supporting documentation throughout the repair to support the final payment claim calculation.

Default milestones for full reclad projects

In most cases, your milestone payments will be based on default milestones, which are in turn based on pre-defined stages of work for full re-clad projects.

These are when:

  1. MBIE receives your notice to proceed and work commences:
       -   The actual costs incurred prior to repair will be used to calculate contributions.
  2. Scaffolding is set up and cladding is removed:
       -   Twenty percent of the approved costs will receive contributions.
  3. Timber replacement or repair is complete:
       -   Twenty-five percent of the approved costs will receive contributions.
  4. Recladding is complete:
       -   Forty percent of the approved costs will receive contributions.
  5. When a code compliance certificate is issued and a ‘final claim’ application is provided to MBIE:
       -   The balance of your total costs of weathertight repair will be used to calculate contributions. This is estimated at 15 percent, but will be adjusted once we review your final claim.

Default milestones for targeted repairs

Targeted repairs have only two default milestones:

  1. 1. When MBIE receives your notice to proceed:
       -   The costs used to calculate contributions in this instance are the actual costs prior to repair.
  2. When you are issued a code compliance certificate, and all invoices are given to us:
       -   The costs used to calculate contributions is the balance of total costs of weathertight repair as evidenced by your invoices.

Customised milestones

If you wish to receive payments at times or in amounts that differ from the default payment schedule, you may propose customised milestones as an alternative.

Your proposed customised milestones must coincide with regular building consent authority (BCA) inspections.

We may have engaged your local council to act as its agent when already on site for BCA purposes, or you may need to rely on a ‘passed’ BCA inspection record as evidence that a milestone has been reached.

If you choose to proceed with customised milestones, your payment plan application must include compelling reasons for doing so. If the builder’s quote shows that a repair is clearly not suited to the default schedule, we will take this into account when considering your draft payment plan.

We may consider a customised payment schedule where:

  • a demolition and rebuild is proposed
  • the repair is for a multi-unit complex involving many stages of work
  • there is an unusual feature of the building or proposed repair work which makes default milestones inappropriate.

Inspection and payment process

Once repairs are underway, your builder (or project manager) must request milestone and building inspections from the council.

In most cases, milestone inspections will occur at the same stage of work as a BCA inspection. However milestone inspections will not automatically occur unless specifically requested, so your builder (or project
manager) needs to be aware of the milestone stages in order to make these requests.

In most cases, the council is contracted to us to provide certain FAP-specific services. This includes:

  • review of repair plans and
  • inspection of repair work at the milestone points.

However, if the council in your area is not contracted to provide this service to us, then we may decide to arrange for another contractor to inspect the repairs prior to making a milestone payment.

You need to let your builder or project manager know they need to request milestone inspections from the council or from us. Your claims advisor will advise you if the council is not contracted for service.

After a milestone inspection has been successfully met, you will be provided with a completed copy of the inspector’s FAP site inspection notice.

If the inspection involved assessing the extent of timber to be replaced (and consequential repairs), you will also be provided with a copy of the inspector’s timber remediation statement.

You then need to submit a payment claim form to us, including the milestone inspection documents. If your council is not contracted and we decided not to send another contractor, you should include the building consent inspection record(s) instead.

Always retain your copies of the documentation from the milestone and council building consent inspections.

Download and complete the payment claim form.

Timing of builder’s invoices

Milestone payments will occur soon after the completion of each FAP milestone.

These payments will probably have no relationship to the timing of your builder’s invoices (which fall in accordance with your building contract – typically monthly).

This means your bank balance will fluctuate as you pay your builder’s invoices and milestone payments are credited to your bank account.

You will need to have agreed sufficient credit with your bank to cover the difference between your own funds and builder’s invoice payments, which may fall due before you can claim or receive a contribution payment for any particular part of the work.

This information is published by the Ministry of Business, Innovation and Employment’s Chief Executive. It is a general guide only and, if used, does not relieve any person of the obligation to consider any matter to which the information relates according to the circumstances of the particular case. Expert advice may be required in specific circumstances. Where this information relates to assisting people: