Don’t be restricted by failing to issue payless notices

Over the course of a project covered by a JCT agreement contractors may submit several payment applications. When one of these is received whoever is responsible for the administration of the contract, be it an architect, the client themselves, or another appointed individual, should review it straight away. If this is not done the amount stated in the application could become the one that has to be paid, even if it is incorrect.

A review will determine if the sum applied to be paid is correct. In the event that it isn’t a payless notice needs to be issued swiftly. This details exactly why the amount stated in the application is not being paid and how the final sum is arrived at, including listing deductions for whatever reasons.

Each contract should set out what the deadlines are for issuing payment applications and payless notices. If any of these deadlines are missed it can cause a lot of problems. With the latter it means the employer has lost the ability to withhold money for any reason, even if it is a valid one.

One pitfall many employers fall into is they believe they don’t need to submit a payless notice if there is nothing due or if they are going to call on counterclaim or abatement to reduce the amount the contractor has billed them. Unfortunately they do need to. If they don’t there is no way they can make changes to the payment. Instead they would have to do it with future payments, but again only if they issue a notice within the relevant timeframe and in the correct manner.

The requirements are rather tricky we know but it is vitally important that employers understand them. Our team at Amison Dispute Resolutions can help, assisting employers during the contract creation and with the administrative duties once the project is underway. We are committed to providing the best value for our clients, ensuring every single service is delivered to the most professional standard.

If you have any questions for us regarding payless notices please contact us.