They've served nothing, and we didn't know we could serve our own
Nothing has come back from the main contractor, and we have just found out we may be able to send our own notice.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
If your application may already stand as the notified sum, see what to do when no notice came at all.
What's happening?
If your main contractor sends no Payment Notice, section 110B of the Housing Grants, Construction and Regeneration Act 1996 may let you send your own. This is often called a default payment notice: your notice of the sum you consider due and how you worked it out.
Whether you need one depends on your subcontract and your application. If your application was sent as the subcontract requires, it may already count as your notice, and you do not send a second one. If it does not count, you may need a separate notice. Every day you wait after your main contractor's deadline pushes the final date for payment back by a day.
A template cannot tell you any of that. Send the wrong notice, or send it the wrong way, and you can lose the cycle or delay your own payment. Check the dates, the form and how it must be served first. Take advice on anything disputed before you send it.
The solution
If your main contractor has given no Payment Notice, check the subcontract, your application, your proof of sending and the dates before you prepare anything. You only need a separate default notice where your application did not already count as the notice. If you do need one, it must state the sum and how it is worked out.
Underpayment Claim checks whether the route is open. We prepare the default notice with the sum and its basis, for you to send in your own name, and record the new final date for payment. Anything disputed goes to your solicitor before the notice is sent.
Example
Illustrative example. The scenario and figures are invented.
The facts
A scaffolding subcontractor applies for £36,000, and the main contractor's Payment Notice window passes in silence. The commercial manager drafts a Default Payment Notice and wants it sent that afternoon. It is not sent that afternoon.
What happens
- First the subcontract is read, with the application and the send record beside it.
- The application went to the site email, but the subcontract names a head office address for payment documents.
- The subcontract only treats the application as the notice where it is sent the way the subcontract requires. So this application may not count on its own.
- Those facts go to the solicitor with the dates. The question: is the default notice route open on this record, and what does it do to the final date for payment?
- The answer is that it is open, and the notice must state the sum and its basis.
- The notice sets out the £36,000, the measure and the period. The authorised person signs it, it goes to the named address by the required route, and the receipt is filed. The original application is kept unchanged.
The cycle in figures
| Item | Amount |
|---|---|
| Application and payee's notice | £36,000 |
| Pay Less Notice | £31,000 |
| Paid on the final date | £31,000 |
| Carried to the next cycle | £5,000 |
The outcome
The main contractor answers inside its own Pay Less Notice window with £31,000 and a stated basis, and pays that on the final date. The £5,000 difference goes into the next cycle with the measure attached.