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What is escrow payment in construction and how does it protect you?
🤖 AI Answer by Biddaro⏱ 4 min read📅 Updated 1 November 2024
⚡ Quick Answer
An escrow payment in construction means your money is held by a trusted third party (like Biddaro) and only released to the contractor when you confirm a milestone is completed satisfactorily. This eliminates the risk of contractors taking advance payments and disappearing.
How Biddaro Escrow Works — Step by Step
1
CLIENT deposits project funds into Biddaro's secure escrow account at the start of the project.2
CONTRACTOR starts work knowing the funds are secured and will be released on milestone completion.3
MILESTONE COMPLETED — Contractor requests milestone payment.4
CLIENT INSPECTION — You inspect the completed work within 48 hours.5
RELEASE or DISPUTE — If satisfied, you release payment instantly. If not, raise a dispute — Biddaro's team mediates.6
PROJECT COMPLETE — Final payment released after snagging period. Both parties protected throughout.Escrow vs Direct Payment Comparison
| Factor | Direct Payment | Biddaro Escrow |
|---|---|---|
| Advance protection | No — money gone if contractor fraud | Yes — money held until milestone |
| Material quality assurance | No way to verify | Inspection before payment release |
| Dispute resolution | Police/court (slow, expensive) | Biddaro mediation (fast, free) |
| Contractor accountability | Low | High — verified + rated |
| Peace of mind | Low | High |
Related topics:
escrowpayment protectioncontractorbiddaro