Wise Up Wednesday: Set Off And Payless Notices Are Devastating
Payless Notices Are Devastating
Not Another Set Off…! Set off and payless notices are devastating.
If great big lumps are being hacked off your applications for payment, you’re not on your own!
Almost every day another Specialist Contractor contacts us to get our help because his account has been clobbered by the Contractor or one of the big Specialist Contractors they are working for.
Set Off And Payless Notices Are Devastating
Undervaluation, Set Off and Payless Notices are the weapons of choice of today’s Contractors, and they can be pretty devastating for your business!
As a Specialist Contractor you will often find that your works are not being valued properly by the QS throughout the course of the job. But, this “undervaluation” pales into insignificance when it comes close to the last or penultimate payment.
That’s when you are ripe to be clobbered big time!
You’ve done the work (or at least the vast majority of it/the difficult part), the Contractor owes you a tidy sum, (because his undervaluation has been mounting up), and that’s when you are most vulnerable.
Exactly that is happening right now to 2 Clients, one for £360k and another for £240k! Ouch…
For many Subcontractors this kind of reduction could mean the difference between survival and insolvency. The Contractor knows that and some will definitely use that to their advantage!
So Why Do Some Get Paid and Some Don’t?
Here are a few thoughts based on 29 years of resolving payment problems exclusively for Specialist Contractors;
- Follow the rules in the contract
- Do not be persuaded not to send delay notices
- Make sure you prepare and submit proper records
- Be certain you understand the payment provisions
- Know the Due Date and Final Date
- Make sure that all applications are in on time and comply with the contract
- Contact the Contractor before the payment is due to make certain they know when you are expecting payment
- Make sure the Contractor knows that;if payment is late, you will suspend your works in accordance with your contract
- If the Contractor pays less than he should take prompt action
Can Subcontractors Suspend Performance?
Suspending performance of the works is a powerful incentive to make the Contractor put you at the top of the list when it comes to making payment.
But you MUST follow the contract!
Used properly, suspension is your best solution to prevent late payment.
You need to be careful and we would always recommend that you take our specific advice before suspending performance.
Remember our team includes Specialist Quantity Surveyors and Construction Contracts Consultants, so we have the capability to resolve your problem fast.
Set Off and Contra Charges
If the Contractor is making a set off from your account or is deducting contra charges, there are steps you can take to resolve the situation.
There is a significant difference between them saying it has cost them £”x”, for whatever reason and them being able to prove that if properly challenged.
The burden of proof falls on them. In other words; they have to prove that these matters are your responsibility and that any costs they say they have incurred have actually been incurred, and that they are reasonable costs reasonably incurred.
The sooner you take action, the sooner you will get your money, but you need to take the right kind of action, otherwise you could make matters worse. So please don’t be shy about contacting us for a free no obligation chat.
I trust that you enjoyed this Wise Up Wednesday and that you will share it with everyone in your team and other Specialist Contractors.
Please remember that we are here to provide solutions exclusively for Specialist Contractors. If you have a payment problem, not sure what to do or just want a second opinion, then we are here for you. Please give us a call on 01773 712116, or email via this link today.
More information about Contracts is on our website.