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 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.
 Related articles on Designing Buildings Wiki
Featured articles and news
Read about the history behind one of Italy's most recognisible buildings.
Roland Busch of Siemens AG looks at how cities can fight climate change.
Every home and small business in Great Britain will be offered a smart meter by the end of 2020.
The PM’s speech stole the headlines but what was said about infrastructure at the Conservative Party conference?
We interviewed the photographer Jade Doskow about her new book documenting the strange architecture of World's Fair sites.
Industry leaders join CIOB and Stronger Together to tackle modern slavery in construction.
Drawing on the recent Mexico earthquake, a collection of free journal articles has been assembled.
Read this introductory article to the base date in construction contracts.
Why is this American teapot-shaped gas station historically significant? Find out here.
Plans for the first phase of Vastint’s 16.5-acre Tetley Brewery development project get the green light.
This article explores the question, how should we regulate the real estate industry?
Specialist regeneration and investment developer UandI announces ambitions with new Manchester office.
Do you have a great idea for how tomorrow's challenges can be met by today's buildings? Enter our ideas competition today.