How late can a Pay Less Notice be served?
By the deadline in your subcontract, counted back from the final date for payment; the Scheme's 7 days applies only if your subcontract sets none.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
If you are not sure a notice is needed at all, see when a Pay Less Notice is needed.
The answer
The 7 days comes from paragraph 10 of Part II of the Scheme for Construction Contracts (England and Wales) Regulations 1998. It is not a fixed period under the Housing Grants, Construction and Regeneration Act 1996, the Construction Act. Many contracts set their own period. For example, the JCT Standard Building Contract With Quantities 2016 uses 5 days before the final date for payment. A notice sent too early may have no notified sum to reduce yet. One sent after the deadline may not work at all. The notice should name the cycle it answers and state the sum due on its own date. To check your main contractor's notice, work out the last day it could arrive. Use the actual final date for payment, the notice period and the rules on when a notice counts as served. Check whether your subcontract counts calendar days or working days. Do not count a statutory deadline in working days without checking the counting rules. Our payment dates calculator counts them for one payment cycle. Keep your calculation with the evidence of when the notice arrived.
Example
Illustrative example. The scenario and figures are invented.
The facts
Your subcontract relies on the Scheme, so a Pay Less Notice must arrive at least 7 days before the final date for payment. The final date is Wednesday 24 July. Your main contractor's notice arrives by email on Thursday 18 July.
What happens
- You work out the last day for the notice: Wednesday 17 July, subject to the rules on when service takes effect.
- You check the email headers and the subcontract's notices clause to confirm when service took effect.
- You keep the calculation, the clause and the arrival evidence together on the cycle file.
The outcome
The notice arrived a day after the last day, so the file records it as late on its face. You confirm when service took effect before you demand the full notified sum.
To have every notice window worked out from your signed subcontract and put in one diary, see our Underpayment Prevention service.
Sources
- Scheme for Construction Contracts (England and Wales) Regulations 1998, SI 1998/649, Schedule, Part II, para 10 (Notice of intention to pay less than the notified sum). legislation.gov.uk.
- Housing Grants, Construction and Regeneration Act 1996, Part II (Construction contracts), as amended by the Local Democracy, Economic Development and Construction Act 2009, Part 8. legislation.gov.uk.