Notifications during construction works - Revision history

Designing Buildings at 08:03, 29 January 2021

2021-01-29T08:03:28Z

← Older revision		Revision as of 08:03, 29 January 2021
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	* Variations in construction contracts.		* Variations in construction contracts.

−	[[Category:Contracts_/_payment]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]]

Designing Buildings at 10:10, 8 October 2019

2019-10-08T10:10:22Z

← Older revision		Revision as of 10:10, 8 October 2019
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	= Introduction =		= Introduction =

−	Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of approvals that may be required before construction works begin, it may also be necessary to issue notices of certain activities as construction proceeds. This is because construction contracts often include requirements for the parties to issue notices to each other under certain circumstances. This is often intended to provide a warning mechanism, enabling the parties to prepare for, or react to, particular situations. The contract should make clear the circumstances under which a notice is required, the form of the notice, the information it should contain, who it should be sent to, at what address and the notice period~~. Failure to follow the correct procedure can result in a subsequent claim being defeated~~.	+	Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of approvals that may be required before construction works begin, it may also be necessary to issue notices of certain activities as construction proceeds. This is because construction contracts often include requirements for the parties to issue notices to each other under certain circumstances. This is often intended to provide a warning mechanism, enabling the parties to prepare for, or react to, particular situations. The relevant contract, regulation, permission etc should make clear the circumstances under which a notice is required, the form of the notice, the information it should contain, who it should be sent to, at what address and the notice period.

	A few of the notices (or in some cases statements) that might be encountered on a construction project include:		A few of the notices (or in some cases statements) that might be encountered on a construction project include:
−
−	~~= Default payment notice =~~
−
−	If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.

	= Notification of failure to proceed regularly and diligently =		= Notification of failure to proceed regularly and diligently =
Line 19:		Line 15:
	= Notice of intention to refer a dispute to an adjudicator =		= Notice of intention to refer a dispute to an adjudicator =

−	If any party on a construction project enters into a dispute with other party, they may issue a notice of their intention to refer the dispute to an adjudicator~~. There are often prescriptive time limits for when things have to be done by.~~	+	If any party to a construction project enters into a dispute with the other party, they may issue a notice of their intention to refer the dispute to an adjudicator.
−		+
−	~~They also both provide for the giving of a notice of dissatisfaction in the event that one party is unhappy with the adjudicator’s decision~~.	+

	= Notice of dissatisfaction =		= Notice of dissatisfaction =

−	If following adjudication, one party is unhappy with the adjudicator’s decision, that party may ~~– but within four weeks –~~ provide a notice of dissatisfaction, giving notice of its intention to refer the matter to arbitration.	+	If following adjudication, one party is unhappy with the adjudicator’s decision, that party may provide a notice of dissatisfaction, giving notice of its intention to refer the matter to arbitration.

	= Notice to proceed =		= Notice to proceed =
Line 34:		Line 28:

	Where it is not the contractor’s fault, construction contracts generally allow the construction period to be extended, known as an extension of time (EOT). When it becomes reasonably apparent that an extension of time is merited, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was justified, they may grant an EOT and the completion date will be adjusted.		Where it is not the contractor’s fault, construction contracts generally allow the construction period to be extended, known as an extension of time (EOT). When it becomes reasonably apparent that an extension of time is merited, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was justified, they may grant an EOT and the completion date will be adjusted.
		+
		+	= Payment notice =
		+
		+	The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) has specific provisions that stipulate that the client must issue a payment notice within five days of the due date for payment, even if no amount is due. Alternatively, if the contract allows, the contractor may make an application for payment, which is treated as if it is the payment notice.

	= Pay less notice =		= Pay less notice =

	The client must issue a pay less notice if they intend to pay less than the amount set out in the payment notice, setting out the basis for its calculation.		The client must issue a pay less notice if they intend to pay less than the amount set out in the payment notice, setting out the basis for its calculation.
−
−	~~= Payment notice for construction contracts =~~
−
−	The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) has specific provisions that stipulate that the client must issue a payment notice within five days of the due date for payment, even if no amount is due. Alternatively, if the contract allows, the contractor may make an application for payment, which is treated as if it is the payment notice.

	= Default payment notice =		= Default payment notice =

−	If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.	+	If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice.

	= Statement of partial possession =		= Statement of partial possession =
Line 53:		Line 47:
	= Statement of retention =		= Statement of retention =

−	Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. This is to ensure that the contractor properly completes the activities required of them under the contract.	+	Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. This is to ensure that the contractor properly completes the activities required of them under the contract. At the date of each interim certificate, architects/ contract administrators or quantity surveyors are obliged to prepare and issue a statement to the client/employer and contractor which specifies the amount of retention deducted in arriving at the amount stated as due on the interim certificate.

−	~~Interim certificates should make clear the amount of retention and a statement should also be prepared (as below) showing retention for nominated sub-contractors.~~	+	= Suspension notice =

−	At the date ~~of each interim certificate, architects/ contract administrators~~ or ~~quantity surveyors~~ are ~~obliged~~ to ~~prepare~~ and issue a ~~statement~~ to the client~~/employer and contractor which specifies~~ the ~~amount of retention deducted in arriving~~ at the ~~amount stated as due~~ on ~~the interim certificate~~.	+	Contractors have a right to stop work if under a construction contract they have not been paid by the final payment date or are owed payments (late payment). They have the right to suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and an extension of time resulting from the suspension. In these cases, the contractor must issue a notice of suspension to the client or the contract administrator, giving at least seven days’ notice of their intention to suspend performance and stating the grounds on which their action is based.

−	= ~~Suspension notice~~ =	+	= Other notifications =

−	~~Contractors have a right~~ to ~~stop work if under a construction contract they have not been paid by the final payment date or are owed payments (late payment)~~. ~~They have the right~~ to ~~suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and an extension of time resulting from the suspension~~. In ~~these cases, the contractor must issue a notice of suspension~~ to the ~~client or the contract administrator, giving at least seven days’ notice of their intention to suspend performance and stating the grounds on which their action is based~~.	+	Other notifications may be required:
		+
		+	* In relation to planning permissions and related conditions.
		+	* In relation to building regulations inspections.
		+	* In relation to the Party Wall Act.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Editor at 16:38, 24 July 2019

2019-07-24T16:38:00Z

Editor: Created page with "Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of app..."

2019-07-24T16:35:33Z

Created page with "Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of app..."

New page

Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of approvals that may be required before construction works begin, it may also be necessary to issue notices of certain activities as construction proceeds. This is because construction contracts often include requirements for the parties to issue notices to each other under certain circumstances. This is often intended to provide a warning mechanism, enabling the parties to prepare for, or react to, particular situations. The contract should make clear the circumstances under which a notice is required, the form of the notice, the information it should contain, who it should be sent to, at what address and the notice period. Failure to follow the correct procedure can result in a subsequent claim being defeated.

A few of the notices (or in some cases statements) that might be encountered on a construction project include:

== Default payment notice ==

If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.

== Notification of failure to proceed regularly and diligently ==

Many contracts, such as the JCT standard form of contract, require the contractor to proceed ‘regularly and diligently’ with the works, irrespective of whether they are likely to achieve the completion date. If they fail to proceed ‘regularly and diligently’, the contract administrator may issue a written warning notice, and if they continue to default, the contract administrator may give notice determining the employment of the contractor. The employer may also be able to claim damages if they can demonstrate that they have suffered a loss.

== Notice that there is a delay, or that there is likely to be a delay that could merit an extension of time ==

When it becomes reasonably apparent that there is, or that there is likely to be, a delay that could merit an extension of time, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was caused by a relevant event, then they may grant an extension of time and the completion date is adjusted.

== Notice of intention to refer a dispute to an adjudicator ==

If any party on a construction project enters into a dispute with other party, they may issue a notice of their intention to refer the dispute to an adjudicator. There are often prescriptive time limits for when things have to be done by.

They also both provide for the giving of a notice of dissatisfaction in the event that one party is unhappy with the adjudicator’s decision.

== Notice of dissatisfaction ==

If following adjudication, one party is unhappy with the adjudicator’s decision, that party may – but within four weeks – provide a notice of dissatisfaction, giving notice of its intention to refer the matter to arbitration.

== Notice to proceed ==

A client (or owner) will issue a notification letter (‘notice to proceed’ (NTP)) to the contractor stating the date on which the contractor can begin project work. The date of the NTP defines the start of the performance time of the contract.

== Notification of an extension of time ==

Where it is not the contractor’s fault, construction contracts generally allow the construction period to be extended, known as an extension of time (EOT). When it becomes reasonably apparent that an extension of time is merited, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was justified, they may grant an EOT and the completion date will be adjusted.

== Pay less notice ==

The client must issue a pay less notice if they intend to pay less than the amount set out in the payment notice, setting out the basis for its calculation.

== Payment notice for construction contracts ==

The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) has specific provisions that stipulate that the client must issue a payment notice within five days of the due date for payment, even if no amount is due. Alternatively, if the contract allows, the contractor may make an application for payment, which is treated as if it is the payment notice.

== Default payment notice ==

If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.

== Statement of partial possession ==

If a building contract allows, the employer can take partial possession of part of the works, before they have been formally completed. This partial possession often requires the consent of the contractor (which shall not be unreasonably withheld) to agree to the partial possession, allowing the employer to use part of the works prior to completion of the whole of the works. Partial possession will require the contractor to issue a statement of consent to the contract administrator.

== Statement of retention ==

Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. This is to ensure that the contractor properly completes the activities required of them under the contract.

Interim certificates should make clear the amount of retention and a statement should also be prepared (as below) showing retention for nominated sub-contractors.

At the date of each interim certificate, architects/ contract administrators or quantity surveyors are obliged to prepare and issue a statement to the client/employer and contractor which specifies the amount of retention deducted in arriving at the amount stated as due on the interim certificate.

== Suspension notice ==

Contractors have a right to stop work if under a construction contract they have not been paid by the final payment date or are owed payments (late payment). They have the right to suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and an extension of time resulting from the suspension. In these cases, the contractor must issue a notice of suspension to the client or the contract administrator, giving at least seven days’ notice of their intention to suspend performance and stating the grounds on which their action is based.

= Related articles on Designing Buildings Wiki =

* Bespoke construction contract
* Construction contractor
* Contract documents for construction
* Contractual obligation.
* Contractual right.
* JCT
* JCT Construction management contract
* Lump sum contract
* Procurement route
* Procurement team
* Standard form of contract
* Tender documentation for construction projects
* Traditional contract for construction
* Traditional contract: tender
* Typical tender process for construction projects
* Variations in construction contracts.

← Older revision		Revision as of 16:38, 24 July 2019
Line 1:		Line 1:
		+	= Introduction =
		+
	Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of approvals that may be required before construction works begin, it may also be necessary to issue notices of certain activities as construction proceeds. This is because construction contracts often include requirements for the parties to issue notices to each other under certain circumstances. This is often intended to provide a warning mechanism, enabling the parties to prepare for, or react to, particular situations. The contract should make clear the circumstances under which a notice is required, the form of the notice, the information it should contain, who it should be sent to, at what address and the notice period. Failure to follow the correct procedure can result in a subsequent claim being defeated.		Construction works can be complex, affecting a large number of people, and having significant health, safety and other implications. As a result, in addition to the number of approvals that may be required before construction works begin, it may also be necessary to issue notices of certain activities as construction proceeds. This is because construction contracts often include requirements for the parties to issue notices to each other under certain circumstances. This is often intended to provide a warning mechanism, enabling the parties to prepare for, or react to, particular situations. The contract should make clear the circumstances under which a notice is required, the form of the notice, the information it should contain, who it should be sent to, at what address and the notice period. Failure to follow the correct procedure can result in a subsequent claim being defeated.

	A few of the notices (or in some cases statements) that might be encountered on a construction project include:		A few of the notices (or in some cases statements) that might be encountered on a construction project include:

−	== Default payment notice ==	+	= Default payment notice =

	If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.		If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.

−	== Notification of failure to proceed regularly and diligently ==	+	= Notification of failure to proceed regularly and diligently =

	Many contracts, such as the JCT standard form of contract, require the contractor to proceed ‘regularly and diligently’ with the works, irrespective of whether they are likely to achieve the completion date. If they fail to proceed ‘regularly and diligently’, the contract administrator may issue a written warning notice, and if they continue to default, the contract administrator may give notice determining the employment of the contractor. The employer may also be able to claim damages if they can demonstrate that they have suffered a loss.		Many contracts, such as the JCT standard form of contract, require the contractor to proceed ‘regularly and diligently’ with the works, irrespective of whether they are likely to achieve the completion date. If they fail to proceed ‘regularly and diligently’, the contract administrator may issue a written warning notice, and if they continue to default, the contract administrator may give notice determining the employment of the contractor. The employer may also be able to claim damages if they can demonstrate that they have suffered a loss.

−	== Notice that there is a delay, or that there is likely to be a delay that could merit an extension of time ==	+	= Notice that there is a delay, or that there is likely to be a delay that could merit an extension of time =

	When it becomes reasonably apparent that there is, or that there is likely to be, a delay that could merit an extension of time, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was caused by a relevant event, then they may grant an extension of time and the completion date is adjusted.		When it becomes reasonably apparent that there is, or that there is likely to be, a delay that could merit an extension of time, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was caused by a relevant event, then they may grant an extension of time and the completion date is adjusted.

−	== Notice of intention to refer a dispute to an adjudicator ==	+	= Notice of intention to refer a dispute to an adjudicator =

	If any party on a construction project enters into a dispute with other party, they may issue a notice of their intention to refer the dispute to an adjudicator. There are often prescriptive time limits for when things have to be done by.		If any party on a construction project enters into a dispute with other party, they may issue a notice of their intention to refer the dispute to an adjudicator. There are often prescriptive time limits for when things have to be done by.
Line 21:		Line 23:
	They also both provide for the giving of a notice of dissatisfaction in the event that one party is unhappy with the adjudicator’s decision.		They also both provide for the giving of a notice of dissatisfaction in the event that one party is unhappy with the adjudicator’s decision.

−	== Notice of dissatisfaction ==	+	= Notice of dissatisfaction =

	If following adjudication, one party is unhappy with the adjudicator’s decision, that party may – but within four weeks – provide a notice of dissatisfaction, giving notice of its intention to refer the matter to arbitration.		If following adjudication, one party is unhappy with the adjudicator’s decision, that party may – but within four weeks – provide a notice of dissatisfaction, giving notice of its intention to refer the matter to arbitration.

−	== Notice to proceed ==	+	= Notice to proceed =

	A client (or owner) will issue a notification letter (‘notice to proceed’ (NTP)) to the contractor stating the date on which the contractor can begin project work. The date of the NTP defines the start of the performance time of the contract.		A client (or owner) will issue a notification letter (‘notice to proceed’ (NTP)) to the contractor stating the date on which the contractor can begin project work. The date of the NTP defines the start of the performance time of the contract.

−	== Notification of an extension of time ==	+	= Notification of an extension of time =

	Where it is not the contractor’s fault, construction contracts generally allow the construction period to be extended, known as an extension of time (EOT). When it becomes reasonably apparent that an extension of time is merited, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was justified, they may grant an EOT and the completion date will be adjusted.		Where it is not the contractor’s fault, construction contracts generally allow the construction period to be extended, known as an extension of time (EOT). When it becomes reasonably apparent that an extension of time is merited, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was justified, they may grant an EOT and the completion date will be adjusted.

−	== Pay less notice ==	+	= Pay less notice =

	The client must issue a pay less notice if they intend to pay less than the amount set out in the payment notice, setting out the basis for its calculation.		The client must issue a pay less notice if they intend to pay less than the amount set out in the payment notice, setting out the basis for its calculation.

−	== Payment notice for construction contracts ==	+	= Payment notice for construction contracts =

	The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) has specific provisions that stipulate that the client must issue a payment notice within five days of the due date for payment, even if no amount is due. Alternatively, if the contract allows, the contractor may make an application for payment, which is treated as if it is the payment notice.		The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) has specific provisions that stipulate that the client must issue a payment notice within five days of the due date for payment, even if no amount is due. Alternatively, if the contract allows, the contractor may make an application for payment, which is treated as if it is the payment notice.

−	== Default payment notice ==	+	= Default payment notice =

	If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.		If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice. The final date for payment is extended by the period between when the client should have issued a payment notice and when the contractor issued the default payment notice. If the client does not issue a pay less notice, they must pay the amount in the default payment notice.

−	== Statement of partial possession ==	+	= Statement of partial possession =

	If a building contract allows, the employer can take partial possession of part of the works, before they have been formally completed. This partial possession often requires the consent of the contractor (which shall not be unreasonably withheld) to agree to the partial possession, allowing the employer to use part of the works prior to completion of the whole of the works. Partial possession will require the contractor to issue a statement of consent to the contract administrator.		If a building contract allows, the employer can take partial possession of part of the works, before they have been formally completed. This partial possession often requires the consent of the contractor (which shall not be unreasonably withheld) to agree to the partial possession, allowing the employer to use part of the works prior to completion of the whole of the works. Partial possession will require the contractor to issue a statement of consent to the contract administrator.

−	== Statement of retention ==	+	= Statement of retention =

	Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. This is to ensure that the contractor properly completes the activities required of them under the contract.		Retention is a percentage (often 5%) of the amount certified as due to the contractor on an interim certificate, that is deducted from the amount due and retained by the client. This is to ensure that the contractor properly completes the activities required of them under the contract.
Line 57:		Line 59:
	At the date of each interim certificate, architects/ contract administrators or quantity surveyors are obliged to prepare and issue a statement to the client/employer and contractor which specifies the amount of retention deducted in arriving at the amount stated as due on the interim certificate.		At the date of each interim certificate, architects/ contract administrators or quantity surveyors are obliged to prepare and issue a statement to the client/employer and contractor which specifies the amount of retention deducted in arriving at the amount stated as due on the interim certificate.

−	== Suspension notice ==	+	= Suspension notice =

	Contractors have a right to stop work if under a construction contract they have not been paid by the final payment date or are owed payments (late payment). They have the right to suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and an extension of time resulting from the suspension. In these cases, the contractor must issue a notice of suspension to the client or the contract administrator, giving at least seven days’ notice of their intention to suspend performance and stating the grounds on which their action is based.		Contractors have a right to stop work if under a construction contract they have not been paid by the final payment date or are owed payments (late payment). They have the right to suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and an extension of time resulting from the suspension. In these cases, the contractor must issue a notice of suspension to the client or the contract administrator, giving at least seven days’ notice of their intention to suspend performance and stating the grounds on which their action is based.
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	* Typical tender process for construction projects		* Typical tender process for construction projects
	* Variations in construction contracts.		* Variations in construction contracts.
		+
		+	[[Category:Contracts_/_payment]]