How it works

Escrow for construction projects

Escrow is an account held by a third party: the money goes in at the start, stays out of reach of both sides, and is only released when an agreed condition is met. Applied to a construction project, that condition is certified progress. The payer is not advancing blind; the builder knows the money exists before starting.

The problem it solves

At the start of a project there is a symmetrical deadlock: the payer will not hand over money without a guarantee of execution, and the builder cannot start without funds. Without a third party, someone has to carry the whole risk. Escrow removes it because the money stops being in either party's hands.

A regulated account, not the supplier's account

What matters is not that an account exists, but whose it is. In the Cimbrium ecosystem funds are not deposited with the group: they are held in regulated escrow accounts under the European PSD2 framework, external to the parties to the contract. If the platform disappeared, the money would still belong to its holder.

Compared with the usual alternatives

Model	Payer's risk	Builder's risk
Direct advance	High: pays before execution	Low
Payment at 90 days	Low	High: finances the works
Bank guarantee	Medium	High: ties up credit lines
Milestone escrow	Low	Low

What releases the money

The condition cannot be an opinion. PactStream combines two instances: an AI analysis of the evidence submitted, returning a 0–100 score with findings classified green, amber and red, and certification by the supervising technician on that same evidence. With both met, the amount is released in under 24 hours.

Escrow is one piece, not the product

Division	What it contributes here
PactStream	The regulated escrow account, verification of progress and release of payment. This is the piece described on this page.
CostPact	What gives the condition meaning: the budget that defines the milestones and the site management — certifications, cost control, purchasing, subcontractors — that produces the evidence over months.
FiscalCore	What happens after money leaves escrow: fiscal allocation of the payment and forms 303, 111 and 130.
PropertyJourney	On a development, the commercialisation that originates the deal and the after-sales that closes it.

An escrow on its own only moves money. What makes it useful on a construction project is having something verifiable on the other side of the condition, and that comes from managing the works.

And the initial advance

The first payment is the delicate one, because by definition there is no work to certify. The Insured Milestone 0 programme covers it with a surety bond, currently under negotiation with a leading insurer.

Frequently asked questions

Is escrow the same as a held or trust account?

In substance, yes. All describe an account managed by a third party that only releases funds when an agreed condition is met. In Spanish practice it is called a cuenta de garantía.

Who controls the money while it is in escrow?

Neither party. The account is external to the contract and regulated under the European PSD2 framework. The payer cannot withdraw it and the builder cannot draw on it before the condition is met.

What happens if the project stops?

Unreleased funds stay in the escrow account in the name of their holder. Because they are not on the platform's or the builder's balance sheet, they are unaffected by either party's situation.

Does escrow make the project more expensive?

It replaces instruments that also carry cost, such as bank guarantees, and that additionally tie up the builder's credit lines. The relevant comparison is not against zero, but against the real cost of financing 90 days of work.

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