Who issues a Pay Less Notice?
Your main contractor, as the payer, or a person your subcontract names to send it.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
That is the rule in section 111 of the Housing Grants, Construction and Regeneration Act 1996. So find the payment the notice relates to, and check where the sender's authority comes from in your subcontract. Do not go by the organisation chart or by who is more senior. Judge the document on what it says and whether it meets the rules, not on its heading. And note that disagreeing with a valuation does not, on its own, give you a right to suspend work.
Example
Illustrative example. The scenario and figures are invented.
The facts
A Pay Less Notice arrives on a job with several contracts in the chain. You need to know whether the person who sent it had the authority to.
What happens
- You write down the payment it relates to, who owes it and where the sender's authority comes from.
- You keep each contract's notices separate from the others.
- If the sender's role or the notice's effect is disputed, you take advice rather than going by its heading or where it came from.
The outcome
The notice is tested against the party your subcontract makes responsible, with the source of its authority recorded. Any dispute over its effect goes for advice.
To have a Pay Less Notice tested for its sender, timing, sum, basis and service, see our Underpayment Claim service.