One progress payment, seven different numbers

The work is built. The contractor has claimed. The developer has certified. The money has not left.

Those four sentences describe one progress payment. Four amounts, four dates, four different people deciding.

It took me a while to accept what that means. These are not stages of one process that you move along. They are separate questions, and each one has its own answer.

So a report that gives a period's progress payment without saying which of them it is has not yet given you a number you can act on.

01The states

Seven states, seven questions

Each state carries the same three fields: who settles it, which document it rests on, and the date it is settled on. They differ. That is the whole point.

1. 1Built

   How much physical work exists on site?

   Settled byNobody alone. The contractor reports, the developer and the supervising architect measure, the construction manager checks separately

   Rests onSite diaries, measurement records, photographs, inspection records

   Settled onThe observation date, meaning the day somebody looked

2. 2Claimed

   How much does the contractor say it is owed for this period?

   Settled byThe contractor

   Rests onThe valuation application, with its measurement schedule

   Settled onThe date it was submitted

3. 3Valuable under the contract

   Under the contract's own rules, how much can be counted at the cut-off?

   Settled byThe contract terms themselves

   Rests onThe valuation, variation and defects clauses, plus the current signed schedule of rates

   Settled onThe valuation cut-off date

4. 4Certified

   How much does the developer formally accept it owes for this period?

   Settled byWhoever holds the developer's signing authority

   Rests onThe certificate

   Settled onThe certification date

5. 5Invoiced

   On what basis is the contractor asking to be paid?

   Settled byThe contractor

   Rests onThe invoice

   Settled onThe invoice date

6. 6Drawable

   How much will one funding source release on a given day?

   Settled byThe funder, on its own conditions

   Rests onFacility conditions, the trust deed, the construction manager's monitoring report, evidence that conditions precedent are met

   Settled onThe date the conditions were met

7. 7Paid

   How much actually reached the contractor's account?

   Settled byThe payment record itself

   Rests onRemittance advice, bank credit

   Settled onThe value date

02A word

One more word that has to be taken apart

"Payable" is not one of the seven, and it is a word people reach for often.

It means the amount on a given day for which every approval is complete and at least one funding source can actually release money.

It is the lower of the net certified amount and the funds drawable that day. You need both numbers. One of them alone does not produce it.

03A miscalculation

Treating a completion percentage as the drawable amount does not reliably point one way

Take the completion percentage from the monitoring report, multiply it by the contract total, and treat the result as what can be drawn this period.

That percentage is an observation from the day the monitor visited. Its base may be the direct works cost rather than the tax-inclusive total. The lender's own formula then applies a loan-to-cost ratio and deducts everything drawn to date.

Which of these three differs, and in which direction, depends on the contract’s own base, ratio and amounts already drawn; it is not safe to assume the number is always too high without checking. Schedule payments against it unchecked and the gap only shows up on the payment date itself.

04Model and statute

What the model contract says is not what the statute says

Source. The Civil Code's default is payment on completion and delivery. Where work is delivered in parts and the price is set for each part, each part is paid on its delivery.

Inference. So monthly valuation is not a statutory default. It is something the contract creates.

Public works in Taiwan have a model contract and a valuation-payment procedure that set out who signs off what, and by when. That procedure does not automatically apply to a private development. A private deal has to be read against its own construction contract, and against whatever the financing and trust documents separately say. Reading a private deal against the public model will not line up.

06Sources

Where each item comes from

Source marks a summary of the provision or model contract, with its article number so the original can be checked. Inference marks what I concluded from it and have not confirmed directly. The study text this came from keeps the two apart on every line, and so does this page.

• SourceCivil Code articles 490 and 505. The default rule for a works contract is payment on completion and delivery.
• SourcePublic Construction Commission model procurement contract, 2025-12-30 revision, articles 3, 5 and 20, with the public works valuation-payment procedure. It includes no valuation before defects are made good, and no effect for a variation that was not signed in writing. Used here as a reference model only.
• SourceArchitects Act article 18. Its first three limbs describe supervision as checking construction against the drawings and checking materials; a fourth limb allows “other supervisory duties as agreed.” Whether that extends to agreeing a valuation amount depends on the engagement contract.
• SourceMandatory terms for pre-sale housing contracts, items 7-1 and 8. Construction funds follow physical progress and are ring-fenced; buyer instalments follow progress, at least 20 days apart.
• SourceTrust Association model development trust deed, article 5(3), 7(5) and 9(5). Drawing on the trust account requires a written application with supporting documents, but who reviews it and what must be attached are left blank; the construction manager is not a co-trustee; the trustee bank reviews form only.
• InferenceThe seven states are not interchangeable because different people settle them, from different documents, on different days.

In your own organisation, which document settles what can be paid this period?

If the numbers on a period in front of you do not line up, write to me. No charge.

max@pactbeam.com→

The full study text is in Traditional Chinese. This page keeps the seven states and the sources in full and summarises the rest. 中文

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