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.
- Extension of time.
- Fair payment practices.
- Final certificate.
- Housing Grants Construction and Regeneration Act.
- Interim certificate.
- Interim valuation.
- Payment notice.
- Remedies for late payment.
- Scheme for construction contracts.
- Small Business, Enterprise and Employment Bill.
 External references
Featured articles and news
Apple's new HQ opened to employees this week, and has been touted as 'the best office building in the world'.
The risk of moisture in hard-to-treat buildings.
Find out about the intricate art of pyrography.
Have a look at this newly-opened linear park on an elevated highway in Seoul.
The charity for the blind wants to encourage greater collaboration with built environment planners.
Read our review of a new book examining methods used to observe how sustainable buildings work in occupation.
BRE and Loughborough University announce plans for a 'dementia-friendly' demonstration home.
CIOB launch new toolkit tackling the poor image construction still suffers among pupils in the 14-19 age group and their teachers.
Find out about adjudication in construction contracts with our introductory article.
BRE publish a new information paper: Understanding the factors affecting flashover of a fire in modern buildings.
London churches in the age of Wren, Hooke, Hawksmoor and Gibbs - Book review.
Our interview with Tom Dyckhoff about his new book 'The Age of Spectacle', starchitects, microhousing, the building he would demolish, and more...