Default payment notice for construction
The Housing Grants, Construction and Regeneration Act (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.
[edit] Related articles on Designing Buildings Wiki
- Cash flow.
- Construction supply chain payment charter.
- Due date.
- Extension of time.
- Fair payment practices.
- Housing Grants Construction and Regeneration Act.
- Interim certificate.
- Pay less notice.
- Payment notice.
- Remedies for late payment.
- Retention.
- Scheme for construction contracts.
- Withholding notice.
[edit] External references
Featured articles and news
Moisture, fire safety and emerging trends in living walls
How wet is your wall?
Current policy explained and newly published consultation by the UK and Welsh Governments.
British architecture 1919–39. Book review.
Conservation of listed prefabs in Moseley.
Energy industry calls for urgent reform.
Heritage staff wellbeing at work survey.
A five minute introduction.
50th Golden anniversary ECA Edmundson apprentice award
Showcasing the very best electrotechnical and engineering services for half a century.
Welsh government consults on HRBs and reg changes
Seeking feedback on a new regulatory regime and a broad range of issues.
CIOB Client Guide (2nd edition) March 2025
Free download covering statutory dutyholder roles under the Building Safety Act and much more.
AI and automation in 3D modelling and spatial design
Can almost half of design development tasks be automated?
Minister quizzed, as responsibility transfers to MHCLG and BSR publishes new building control guidance.
UK environmental regulations reform 2025
Amid wider new approaches to ensure regulators and regulation support growth.
The maintenance challenge of tenements.
BSRIA Statutory Compliance Inspection Checklist
BG80/2025 now significantly updated to include requirements related to important changes in legislation.
Shortlist for the 2025 Roofscape Design Awards
Talent and innovation showcase announcement from the trussed rafter industry.
OpenUSD possibilities: Look before you leap
Being ready for the OpenUSD solutions set to transform architecture and design.
Global Asbestos Awareness Week 2025
Highlighting the continuing threat to trades persons.
Retrofit of Buildings, a CIOB Technical Publication
Now available in Arabic and Chinese as well as English.
Comments
If a contractor issues an application, but the payee does not issue a payment notice, then the contractor also does not issue a default notice.Would the application automatically become the default notice?