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
How can digital twins boost profitability within construction?
A brief description of a smart construction dashboard, collecting as-built data, as a s site changes forming an accurate digital twin.
Unlocking surplus public defence land and more to speed up the delivery of housing.
The Planning and Infrastructure bill oulined
With reactions from IHBC and others on its potential impacts.
Farnborough College Unveils its Half-house for Sustainable Construction Training.
Spring Statement 2025 with reactions from industry
Confirming previously announced funding, and welfare changes amid adjusted growth forecast.
Scottish Government responds to Grenfell report
As fund for unsafe cladding assessments is launched.
CLC and BSR process map for HRB approvals
One of the initial outputs of their weekly BSR meetings.
Architects Academy at an insulation manufacturing facility
Programme of technical engagement for aspiring designers.
Building Safety Levy technical consultation response
Details of the planned levy now due in 2026.
Great British Energy install solar on school and NHS sites
200 schools and 200 NHS sites to get solar systems, as first project of the newly formed government initiative.
600 million for 60,000 more skilled construction workers
Announced by Treasury ahead of the Spring Statement.
The restoration of the novelist’s birthplace in Eastwood.
Life Critical Fire Safety External Wall System LCFS EWS
Breaking down what is meant by this now often used term.
PAC report on the Remediation of Dangerous Cladding
Recommendations on workforce, transparency, support, insurance, funding, fraud and mismanagement.
New towns, expanded settlements and housing delivery
Modular inquiry asks if new towns and expanded settlements are an effective means of delivering housing.
Building Engineering Business Survey Q1 2025
Survey shows growth remains flat as skill shortages and volatile pricing persist.
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.