Construction Act changes come into force from 1 October 2011

From the 1 October 2011 the long awaited changes to the Housing Grants Construction and Regeneration Act 1996 ("the Construction Act") will come into force.

The Act changes part of the payment mechanism by giving payment notices more importance and introduces default payment notices where there is a failure to serve them. The Act will now also apply to construction contracts entered into verbally and it makes changes to some of the Adjudication provisions.

In a change to the previous legislation if a paying party (or a specified person such as an architect, engineer or contract administrator employed by the paying party) fails to serve a payment notice the party who is to receive payment may serve a payment default notice stating the amount to be paid. If they have already submitted an interim application for payment showing how the amount claimed has been calculated then they do not need to serve a further notice.

It is intended that this will help to put to an end contractors and sub-contractors being left in limbo where it is a condition precedenct that a certificate is issued to determine the amount that is due to be paid but there is an inadveretent or intentional delay in the issue of that certificate.

To find out more read the first of two articles prepared by Richard Millard or contact him on 01908 689381 or by email on rmillard@geoffreyleaver.com