What makes a Pay Less Notice valid under the Construction Act?
It must come from the right person on time, state the sum due and how it was worked out, and be served as your subcontract says.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
To see what a valid notice should contain, see what a Pay Less Notice should look like, line by line.
The answer
The sum is what your main contractor considers due on the date the notice is sent. That is the rule where section 111 of the Housing Grants, Construction and Regeneration Act 1996 applies. The heading does not decide it: the same tests apply whether it says Pay Less Notice, payless notice or nothing at all. So check who sent it and whether your subcontract lets them. Work out the final date for payment and the notice deadline using your subcontract's counting rules. Check the sum, the calculation behind it and how the notice reached you. A template can help you run these checks, but it cannot make a notice valid. Keep the notice question separate from the argument about the valuation. Take advice where the effect of the notice, or whether the Act applies to your subcontract at all, is disputed.
Example
Illustrative example. The scenario and figures are invented.
The facts
Your main contractor's Pay Less Notice states £70,000 against a notified sum of £100,000. Before you accept the lower figure, you check it meets the requirements.
What happens
- You record who sent it, the deadline, when it actually arrived and the date its sum is valued at.
- You list each deduction with the evidence behind it.
- Your subcontract requires recorded post, but there is only an email receipt, so you record that as an open question on service.
The outcome
What the notice says and how it was sent are each recorded with their evidence. The service question stays open rather than being treated as an automatic win.
To have a Pay Less Notice tested and each deduction valued before the final date for payment, see our Underpayment Claim service.