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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11125
Experience:  30 years as a practising solicitor.
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I am the director of a company in the construction industry.

Resolved Question:

Hi, I am the director of a company in the construction industry. We completed a job for a main contractor 18 months ago and they kept a retention. They asked us to do a few minor items after the year was up but are now refusing to pay the retention because they are saying they have never got practical completion (the hospital wards are being used). I thought under the Construction Act 2011 this was not allowed - they are saying because they said that we had to wait until 12 months after practical completion is allowed. I thought this is exactly what the Act of 2011 prohibited
Submitted: 2 years ago.
Category: Law
Expert:  Nicola-mod replied 2 years ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Customer: replied 2 years ago.

HI

Happy to wait, thanks, Claire

Expert:  Nicola-mod replied 2 years ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Expert:  JGM replied 2 years ago.
Thank you for your question.
I am sorry for the delay in answering your question. It has just been brought to my attention.
You are correct. The "new" legislation is designed for this type of situation and extends the law prohibiting "pay when paid" situations by saying that a main contractor can't rely on certification issues to deny payment to a sub contractor.
Here is a summary of the law then and now:
"Conditional payment clauses
The previous law: provisions which make payment conditional upon receipt of payment from a third party ('pay when paid' clauses) are ineffective, unless that third party is insolvent. The Construction Act does not prohibit clauses which make payment conditional on other events, such as 'pay when certified' clauses - where payment is conditional on a certificate being issued under another contract.
The amendment: a clause will be invalid if it makes payment conditional on:
performance of obligations under another contract; or
a decision by any person as to whether obligations under another contract have been performed.
This is to prevent a party up the line from relying on circumstances relating to its own contract to delay payment under a separate contract - for example, the fact that an employer has not complied with its certification obligations to a main contractor cannot be used by the main contractor to deny payment to a subcontractor."
I hope that helps you to go back and argue the position with the main contractor.
Please leave a positive response so that I am credited for my time.
JGM, Solicitor
Category: Law
Satisfied Customers: 11125
Experience: 30 years as a practising solicitor.
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