Last edited 08 Oct 2019

Notifications during construction works

1 Introduction
2 Notification of failure to proceed regularly and diligently
3 Notice that there is a delay, or that there is likely to be a delay that could merit an extension of time
4 Notice of intention to refer a dispute to an adjudicator
5 Notice of dissatisfaction
6 Notice to proceed
7 Notification of an extension of time
8 Payment notice
9 Pay less notice
10 Default payment notice
11 Statement of partial possession
12 Statement of retention
13 Suspension notice
14 Other notifications
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[edit] 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 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:

[edit] 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.

[edit] 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.

[edit] Notice of intention to refer a dispute to an adjudicator

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.

[edit] Notice of dissatisfaction

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.

[edit] 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.

[edit] 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.

[edit] 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.

[edit] 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.

[edit] Default payment notice

If the client (or specified person) fails to issue a payment notice, the contractor may issue a default payment notice.

[edit] 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.

[edit] 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. 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.

[edit] 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.