Builders’ Problems SOLVED Deducting monies for poor standard of work

Problem: COULD YOU help me to understand the consequences if my company fails to pay a sub-contractor that has produced very poor quality work on two of our projects?

My company is a building contractor and we employed the sub-contractor to carry out drylining work on two of our projects earlier in the year. However, their works are not up to standard and I do not want to make any further payment on either job until the sub-contractor attends the quality issues.

Response: I HAVE assumed that when you say the subcontractor is working on two projects, you have employed the sub-contractor under two separate contracts. That said, the difference between having a single contract to having two contracts is that you merely double up on the contractual procedures.

Any application for payment you receive from the sub-contractor on either project, you are entitled to carry out your own assessment of the work done and come to a valuation accordingly. That sounds quite straight forward, but, there are strict timelines in which you must carry out your own valuation and advise the same to the sub-contractor.

Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.

This all stems from the Housing Grants, Construction and Regeneration Act 1996 (as amended), which implies certain terms into a construction contract including the mandatory requirement of issuing what is called a pay less notice 7 days before the date that the final payment is due to be paid IF you want to pay a lesser amount than the so-called ‘notified sum’.

Failure to issue a pay less notice on time will mean that you must pay the notified sum, which could be the net amount that the sub-contractor had claimed (providing the application from the sub-contractor is valid). Additionally, you must also state in any pay less notice the amount that you consider was due at the date of the notice and the basis of the valuation.

© Michael Gerard 2023

The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.