Default payment notice for construction
The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) include provisions to ensure that payments are made promptly throughout the supply chain.
These provisions include:
- The right to be paid in interim, periodic or stage payments.
- The right to suspend (or part suspend) performance for non-payment and to claim costs and expenses incurred and extension of time resulting from the suspension.
- Pay when certified clauses are not allowed, and the release of retention cannot be prevented by conditions within another contract.
In addition, there are specific provisions in relation to the procedures for making payments.
- The client must issue a payment notice within five days of the 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 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 notified sum is payable by the final date for payment.
- 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.
 Related articles on Designing Buildings Wiki
- Cash flow.
- Construction supply chain payment charter.
- Extension of time.
- Fair payment practices.
- Housing Grants Construction and Regeneration Act.
- Interim certificate.
- Pay less notice.
- Payment notice.
- Remedies for late payment.
- Scheme for construction contracts.
- Withholding notice.
 External references
Featured articles and news
Find out about the different types of delays on construction projects.
Researchers at Wien university have developed new system to create an inflatable concrete structure.
ICE responds to the first consultation on the government's industrial strategy post-Brexit.
Take a look at this newly-opened tower in Chicago with a remarkable 20:1 height-to-base ratio.
An Arc de Triomphe for the late-20th century, the La Grande Arche of Paris.
Richard Hayward of Legrand asks whether technology could help developers meet the needs of an increasingly diverse population.
Thomas Heatherwick's ambitious steel structure begins construction.
The principles, practice and formwork of one of the most important components of modern architecture.
New report claims that inappropriate standards and regulations are holding back the use of composites.
The global smart homes and smart light commercial market will grow fastest in the UK.
Futurist Thomas Frey explores the concept of Disposable Housing - could it be a reality sooner than we imagine?