- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 01 Oct 2020
Pay less notice for construction contracts
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
- Certificate of non completion.
- Contract sum.
- Default payment notice.
- Due date.
- Extension of time.
- Fair payment practices.
- Final certificate.
- Housing Grants Construction and Regeneration Act.
- Interim certificate.
- Interim valuation.
- Payment notice.
- Payment schedule.
- Remedies for late payment.
- Scheme for construction contracts.
- Small Business, Enterprise and Employment Bill.
 External references
Featured articles and news
Guidance offered on COVID-19 green recovery, building safety and more.
Providing strength and support above the joists.
Enforcer will test and investigate product safety.
Underfloor air conditioning comes to 24 St James's Square.
Consultation on public right to buy unused public property.
IHBC resource offers improved consistency.
New laws to ‘retain and explain’ historic statues.
The principles and art of the possible. Book review.
From horse and cart to hypermarket.
How elements and processes work together in a systems approach.
CIOB offers digital guide to proactive methods of working.
Tech will drive professional development in fields tied to infrastructure.