construction subcontractor payment problems

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Wise Up Wednesday: Watch Out For The Christmas Grinch…

Our Wise Up Wednesday Guides are here to give Specialist Contractors a quick burst of useful information, sometimes quirky, but always designed to help you succeed in your business life, irrespective of your size or specialisation.

Here’s A Quick Warning About The Christmas Grinch

The Grinch is a bitter, grouchy, cave-dwelling Contractor with a heart “two sizes too small” who preys on the merry and warm hearted Subbies. His only companion is his unloved, but loyal dog, Stabard (come on work it out).

From his cave, the Grinch jealously listens to the noisy Christmas festivities, as the Subbies celebrate actually having made some reasonable profits. A feat the Grinch is incapable of!

Annoyed, he decides to stop Christmas from coming by stealing their Payment (which they need for presents, trees, and food for their Christmas feast). He crudely disguises himself as Santa Claus, by issuing a Payment Notice, but then at the last minute snatches it all away with a heartless Payless Notice that contains about as much truth as Donald Trump’s speeches.

The Grinch steals all of the Subbie’s’ Christmas presents, the Christmas tree, and even the log for their fire.

The Grinch then takes his sleigh to the top of Mount Bwankers, but rather than help the Grinch to celebrate by lending him another £trillion £zillion pounds, the Bwankers take all his ill gotten gains and throw the Grinch into the Abyss!

As dawn breaks, the Grinch expects to hear the Subbies’ bitter and sorrowful cries, but is confused to hear them singing a joyous Christmas song instead. He puzzles for a moment until it dawns on him that “maybe construction, means a little bit more to them” than just money, despite the fact that they are rather better than at making it!

The Grinch is condemned to spend eternity in the Abyss, whilst the Bwankers finally realise where their bread is buttered, and go off to celebrate Christmas with the Subbies!

Don’t Let This Be You…

A fairy tale perhaps, but as in all good fairy tales there is a serious message. Do not allow the Grinch to steal your money this Christmas!

The Construction Act, provides 3 great remedies for late or non-payment (Suspension and Adjudication and the threat of either or both).

Unfortunately these remedies are not used as widely as they should be.

One of the main reasons, is that there is a good deal of uncertainty about how much is due for payment and when it should be paid.

Use The Contract To Get Paid On Time

The Construction Act applies to the vast majority of projects (some are excluded by the Act itself), and the Scheme applies to non-compliant contracts (or to that part of a contract that does not comply), so if it is a “Construction Contract” as defined in the Act then there is no escaping the legislation for those who would seek not to pay you.

To conform to the legislation with regard to stage payments, construction contracts should now provide for the following main stages:

  • Payment Due Date – the date each month when a payment becomes due.
  • Payment Notice – a notice indicating the amount due on the due date (the ‘notified sum’) and the method of its calculation.
  • Final Date for Payment – the date on which payment should be made.
  • Payer’s ‘Pay Less’ Notice – if the payer intends to pay less than the amount due, a notice to that effect, together with explanation.

The new provisions require a payment notice and a pay less notice to be given even if the amount which is due is zero. They also require payment notices and pay less notices to be served separately.

Cutting Through The Grinch Speak

Don’t assume that the Grinches always comply with the law, or that they are bound to be better at this than you. They are Grinches after all…

Once you get your head around it, it all makes sense, so don’t let the way contracts are drafted put you off, and don’t let them steal your payment. entitled to.

It might be getting near Christmas but don’t give the Grinches a gift that they don’t deserve…

As always, if you need any help interpreting contracts, or help to resolve your payment problems, please don’t hesitate to pick up the phone, take action and give us a call on 01773 712116 or email info@streetwisesubbie.com. And if you are a Streetwise Buddy please make sure you take advantage of your membership benefits – don’t get stressed – get paid!

Best regards

Barry

P.S. We are the UK’s #1 provider of professional business support services exclusively for Specialist Contractors, so whatever you need why not call our friendly team?

Become a member online by clicking here. 


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