The Complete Guide to Construction Escrow Payments

Why escrow beats lump-sum checks

Large single payments create imbalance: owners fear paying before work is done; contractors fear finishing work without payment. Milestone escrow ties each release to documented progress.

Structuring milestones

Match releases to inspectable deliverables — foundation, framing, rough-in, finals — not calendar dates alone. In the DMV, align milestones with inspection schedules where possible.

• Define acceptance criteria in writing before work starts
• Hold retainage until punch list completion
• Document change orders before releasing additional funds