When does the Owner typically make payments to the Contractor?

The Owner typically makes payments to the Contractor upon receipt of the approved Application and Certificate for Payment because this document serves as a formal request from the Contractor to receive payment for work that has been completed. It outlines the progress made on the project, the amount due at that stage, and confirms that the work has been reviewed and approved by the Architect. This process ensures that payments are linked to actual work performed and helps maintain a clear record of financial transactions related to the project.

The Application and Certificate for Payment is an essential aspect of construction contracts, as it assures the Owner that the Contractor is adhering to the agreed-upon terms of the project, including the quality and extent of the completed work. The approval process adds a level of oversight, ensuring that funds are disbursed appropriately, thereby protecting the Owner's interests.

In contrast, making payments prior to documentation or completion of services can lead to disputes over whether the work was satisfactorily completed. Requiring payments only after full completion or after the Architect's final approval delays the cash flow needed for the Contractor to continue work, which can be detrimental to project timelines and relationships between parties involved.