Penultimate certificate for construction contracts
The JCT minor works building contract (MW 16) includes provision for a ‘penultimate certicate’, which signifies that there is no more work to value and triggers the final progress payment. Once issued, only the final certificate remains.
The due date for payment is 7 days after practical completion and the penultimate certificate must be issued within 5 days of the due date. The final date for payment is 14 days from the due date.
The difference between the penultimate certificate and a normal certificate for a progress payment is that half the retention is now released. Retention is a percentage of the amount certified as due to the contractor that is retained by the client to ensure that the contractor properly completes the works. So for example if the total retention was 5%, then 97.5% of the amount owed will become payable once the penultimate certificate has been issued, rather than 95% under a normal progress payment.
There will be no further payments until any defects that become apparent have been rectified and the final certificate is issued. At this point the final payment will be made, including the release of the remaining retention.
The Housing Grants Construction and Regeneration Act (The Construction Act) sets out requirements for making payments under construction contracts, including a requirement to issue a pay less notice (previously a withholding notice) if the client intends to pay less than the amount set out in a payment notice, setting out the basis for its calculation. See The Construction Act for more information.
NB There is no provision for the penultimate certificate to be withheld once practical completion has been certified. This means that certifying practical completion is a crucial point in the progress of the works, when the penultimate payment is triggered, the contractor’s liability for liquidated damages ceases and the client takes possession of the site. See practical completion for more information.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Create a profile, write informed product articles and share.
Aluminium Composite Panels (ACP) is one example.
Top 50 Women in engineering 2022.
Inventors and innovators at ICE.
Life, death and art at the Stuart court. Book review.
Real estate, place adaptation and innovation.
Review and comment on the revised draft before July 11.
We are indeed now 10 years old, so go on and be bold !
Write about something you know, help us build and grow !
IHBC's 25th anniversary 2022 Aberdeen School.
A blended event and triumphant return.
New Construction Leadership Council Co-Chair selected.
Mark Reynolds succeeds Andy Mitchell as Co-Chair of CLC
Designing Buildings is 10 years old.
Types of work to existing buildings.
From alteration to deconstruction on DB.
Publication available
In the sunshine things get hotter.
Understanding temperature in buildings on DB.
Giving power to the consumer on the road to net-zero.
A call for home energy management to be modernised.
How many different types can you think of ?
50th anniversary of the first Pride parade UK.
Looking back and fourth to what still needs to be done.
Balkrishna Doshi wins Royal Gold Medal 2022.
Pioneering Indian environmental design Architect.
The greenest building is the one already built.
History of Temple Meads rewritten.
UK crying out for female tradespeople says CIOB research.
Currently standing at just 1%.
Find out more with BSRIA.
Changes come into force for F,L,O and S.
Comments
To start a discussion about this article, click 'Add a comment' above and add your thoughts to this discussion page.
The due date for interim payment following practical completion is 7 days under MW11 not 14 days with certification required within 5 days then payment within 14 days.