Renovation & construction
Payment Control on Site: Certifications, Photos, Documents
Before each payment you need an accepted certificación with measurements, photos of concealed work, a correct factura and a bank transfer. The package, and a paid-versus-done test.
Payment control on site rests on one rule: pay not by the calendar and not on request, but for the accepted quantity. Before each payment the client should hold a package of a certificación with measurements, photos of the work before it is closed up, a factura with the mandatory details, and a bank transfer. If more has been paid than accepted, the next payment waits.
What package of documents is needed before a payment
Milestone schedules and retention are described in the article on milestones and retention under the contract. The question here is different: what exactly is in the folder on the day of payment.
| Document | What to check | Why |
|---|---|---|
| Certificación (certificate of work done) | Items match the budget, quantities are confirmed by measurement, the technician's signature | The basis for payment and a reconciliation with the budget |
| Photos and date | Concealed work photographed before closing: pipes, wiring, waterproofing | It cannot be checked later without opening up |
| Factura (invoice) | Details under Real Decreto 1619/2012, art. 6: number and date, names of the parties and NIF, description of the work, IVA rate and amount | The basis for bookkeeping and tax deduction, if it is available to you |
| Payment order | Details match the factura, amount and purpose | Proof that payment was made |
| Changes (modificados) | Signed before execution, with a price | Rules out "agreed verbally" |
If technical supervision is in place, the certificación is signed by the supervisor, and that is his direct task, see the article on technical supervision. If there is no supervision, the measurements are taken by the client or by a technician brought in "on call", and no payment should be made without measurements.
What must not be paid in cash
Under art. 7 of Ley 7/2012, cash may not be used in transactions where at least one party acts as a businessperson or professional, if the amount is 1,000 € or more. The threshold is confirmed by the Agencia Tributaria. A breach counts as a serious administrative infracción: a fine of 25% of the amount paid in cash, with the payer and the recipient jointly liable. On a renovation this means every payment to a contractor goes by transfer. "Cash for a discount" contradicts this rule and breaks the paper trail.
What to ask the contractor besides the factura
If the works are carried out by subcontractors, a dispute over paying them can reach the client: under art. 1597 of the Código Civil, subcontractors may claim payment from the owner up to what he still owes the contractor (BOE). So before the last payment it makes sense to hold written confirmation that the contractor has paid the people who did the work.
The tax side: under art. 43.1.f of the Ley General Tributaria, clients who order works within their own main economic activity are subsidiarily liable for the contractor's taxes that he should have passed on to the client or withheld (for example IVA and withholdings on pay), unless they hold a fresh AEAT certificate that the contractor has no debts (the certificado for contratistas y subcontratistas, valid for 12 months) (LGT). Whether this applies to your SL and the property is decided by an asesor fiscal (tax adviser); you can ask the contractor for the certificate in any case.
The "paid versus done" test
Before each payment compare two shares: the accepted quantity and the amount already paid. A worked example, not a forecast. A contract for 70,000 €. 35,000 € has been paid (50%). By measurements, work worth 28,000 € has been accepted (40%). If the contract holds back 5% (an assumption), the payable amount is 26,600 €, so the overpayment is 8,400 €. The next payment is postponed until the accepted quantity catches up with the payments. Until it does, you are in effect lending those 8,400 € to the contractor.
The same test works in reverse: if the contractor asks for an advance "for materials", ask for the suppliers' invoices or pay for the materials directly. How to keep plan and actual in one table is covered in the article on renovation budget control.
When this scheme will not work
It does not work without a budget with measurements: there is nothing to reconcile against. It does not work if changes are made verbally, or if a payment is confirmed only by the contractor. For small one-off jobs the full package is excessive: a factura, a transfer and a photo of the result are enough. On DNPI projects the investor sees the budget and the status of works in the digital cabinet, and the general logic of reconciling plan and actual can be tested in the investor calculator.
Questions and answers
Can I pay a contractor in cash?
If the transaction is 1,000 € or more and one party is a businessperson, no (art. 7 Ley 7/2012). The fine falls on both parties. Pay by transfer.
What advance is acceptable?
There is no rule: the contract sets the advance. I would tie it to specific costs, for example a purchase of materials with documents, not to the "start of works".
What is a certificación de obra?
It is a document in which the technician confirms the quantity and cost of the work done in the period. Payment goes against it, not on the contractor's request.
Is the client liable for the contractor's debts to the tax authorities?
In some cases yes, if the client orders the works within his main activity and has not obtained an AEAT certificado (art. 43.1.f LGT). Whether this applies to you is checked by an asesor fiscal.
