Apply for payment every month, even on a letter of intent

Applying every month on a letter of intent keeps the value of your work on the record and the cash moving, even without a subcontract. Apply for the full measured value of the work done, whatever the paper later turns out to be.

Updated: 25 September 2026. By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

Where a letter of intent is a construction contract, the Housing Grants, Construction and Regeneration Act 1996 applies to it like any other. Where the letter has no adequate payment terms, the Scheme for Construction Contracts (England and Wales) Regulations 1998 fills the gap. Even so, subcontractors on a letter often invoice once, for the cap, then wait for the subcontract. Months pass with the value of the work on nobody's record but their own. A monthly application, measured and with its build-up attached, puts the growing value in front of your main contractor every month. It draws a response, or a silence, that you can rely on later. And it stops a balance building up behind a cap nobody is talking about.

How to do it

Check the letter for payment terms: application dates, due dates, the final date for payment and who gives the notices.
Ask your solicitor whether the Scheme's payment rules fill any gaps, and which dates follow. Put those dates in the diary.
Apply every month for the full measured value of the work done. Attach the build-up and put anything beyond the cap on its own line.
Keep each application, the proof of sending and any notice received in reply on one file.

Example

Illustrative example. The scenario and figures are invented.

The facts

A cladding subcontractor works for 5 months on a letter of intent with a £100,000 cap and no payment terms. It has applied once, for the cap, because it was waiting for the subcontract.

What happens

The subcontractor's solicitor advises that the letter is a construction contract, and that the Scheme supplies the payment dates.
From month 6 the subcontractor applies every month for the measured value, with the work beyond the cap on its own line.
The first of these applications shows work done of £265,000 against £100,000 paid.

The outcome

The main contractor pays £120,000 on the next due date. It settles the rest inside the subcontract, which both sides sign a month later. Before the monthly applications, the balance had built up for 5 months with nothing on the record.

To have this set up for you, see our Letter of Intent Loss Prevention service.