Construction Act becomes effective

Are you aware of the changes brought in by the Construction Act 2009, which came into force on 1 October 2011?

Significant changes have been made to the payment procedures that will apply to all Development Agreements and JCT Building Contracts.

1. Previously there was no specific legal sanction if the paying party failed to issue a payment notice. This has now changed and if no payment notice is issued the application for payment issued by the Contractor may serve to be the payment notice instead.

2. The Payer now how has the right to issue a “pay less notice” if he doesn’t agree with the requested sum. The “pay less notice” gives the Payer the opportunity to notify the Contractor of his intention to pay less than the requested amount and must be served before the final contractual date for payment.

3. The Act also gives the Contractor the right to suspend work for non payment and charge for costs and expenses if this right is exercised.

To find out more please contact Nick Wookey.