Does retention of title keep my materials safe if my main contractor goes bust?
Only for unfixed materials you can identify, where your terms kept ownership until you were paid; built-in materials generally go with the building.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
The clause that keeps ownership is called retention of title. It sits in your quotation or subcontract and says the goods stay yours until you are paid. It can work for unfixed goods you can identify, but not once they are fixed into the building. It can also be defeated, for example where the employer, your main contractor's client, has already paid for the goods under the main contract. Whether that has happened is a question for your solicitor. The practical steps do not wait for the legal answer. Photograph and list what is on site, and match each item to its delivery ticket and invoice. Tell the administrator or liquidator in writing which goods you claim. Do not remove anything from a site you no longer control without their consent or legal advice. Taking goods can create a claim against you.
Example
Illustrative example. The scenario and figures are invented.
The facts
An M&E subcontractor has £28,000 of materials on site when its main contractor enters administration. There is a packaged plant unit still in its crate, valves in a locked container and pipework that is already installed. Its subcontract includes its retention of title condition.
What happens
- The site manager photographs every item the same morning, with serial numbers and locations, and matches each to its delivery ticket and invoice.
- The subcontractor writes to the administrator claiming the plant unit and the valves as its own. It attaches the photographs, the tickets and the retention of title condition.
- The installed pipework is treated as part of the building and left in the account as a debt.
- The administrator's agents check that the employer has not paid for the claimed items, and agree a collection date.
The materials in figures
| Item | Amount |
|---|---|
| Materials on site | £28,000 |
| Plant unit and valves released | £21,700 |
| Installed pipework left in the claim | £6,300 |
The outcome
£21,700 of goods come back under the retention of title condition, collected by agreement rather than taken. The £6,300 of installed pipework goes into the claim as a debt.
To have what is yours on site listed, photographed and claimed from the administrator or liquidator before it is built in or used, see our Insolvency Claim service.