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ARTICLE · 03 NOVEMBER 2011

The New Construction Act - Finally Live!

Charles Russell Speechlys LLP
Charles Russell Speechlys LLP
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Charles Russell Speechlys LLP

Charles Russell Speechlys LLP

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From 1 October 2011 a payment regime that applies to all ‘construction contracts’ entered into on or after 1 October 2011 came into force.

United KingdomReal Estate and Construction
Kate Knox
Kate Knox

From 1 October 2011 a payment regime that applies to all 'construction contracts' entered into on or after 1 October 2011 came into force. The changes to the payment provisions set out in the Housing Grants, Construction and Regeneration Act 1996 (known as the 'Construction Act') have been introduced by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (the "LDEDC Act 2009").

Changes to the payment procedure

In simple terms, construction contracts will need to provide for the following payment structure:

  • Payment Due Date
  • Payment Notice
  • Payer's 'Pay Less' Notice
  • Final Date for Payment

The below diagram highlights the new process:

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