What is a Payment Notice?
A Payment Notice is the notice your main contractor sends after your application, saying what it thinks is due and how it worked that out.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
The rules are in section 110A of the Housing Grants, Construction and Regeneration Act 1996. It must state the sum considered due at the payment due date and how that sum was worked out. Your subcontract says who sends it, to whom and by when. A valid notice sent in time fixes the notified sum. Under section 111, your main contractor must pay that sum by the final date for payment, unless a valid Pay Less Notice follows. The notified sum can differ from your application and from what the work is really worth, so keep all three figures apart in your records. If no Payment Notice arrives, your application may stand in its place, but check that rather than assume it.
Example
Illustrative example. The scenario and figures are invented.
The facts
You apply for £62,000. Your subcontract names your main contractor's quantity surveyor as the person who sends the Payment Notice, and it fixes the due date.
What happens
- The notice arrives inside the window, from the named quantity surveyor.
- It states £54,000 and shows how: the work to date, the payments already made and the £62,000 application it answers.
- You file it with the record of when and how it arrived.
- You check your other subcontracts separately, because each may name a different sender and different dates.
The outcome
The Payment Notice answers your £62,000 application with £54,000, from the named quantity surveyor, with the record of its arrival on file.
If one has cut your application and the final date is close, Underpayment Claim checks it the same day.