Joint Control

Definition

Joint control refers to an independent escrow used to safeguard and disburse construction funds.

Purpose

The purpose of joint control is to ensure the proper allocation and management of construction funds. It safeguards the interests of all parties involved in a construction project by managing the disbursement of funds according to pre-agreed terms and progress milestones.

Examples of Use

1. Escrow Accounts: Construction projects often use joint control escrow accounts to hold and release funds as specific project phases are completed.
2. Fund Management: Contractors and clients utilize joint control to ensure that payments are made only after verifying that work has been satisfactorily completed.
3. Risk Mitigation: Joint control helps mitigate financial risks by ensuring that funds are used appropriately and according to the project's progress.

Related Terms

• Escrow: A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.
• Construction Financing: The method of funding the construction of buildings and infrastructure.
• Project Milestones: Specific goals or stages within a project that must be achieved before funds are released.

Notes

Effective joint control requires clear communication and documentation of project milestones and completion criteria. It protects both the owner and contractor by ensuring that payments are made only for completed work.