In this section:

Reduced or under payment has been received
Next Steps

Contractor disagrees with valuation
Contractor is witholding payment
Contractor doesn't respond at all

How to get it right next time
Agree a default application process
Support your applications for payment
Chase before payment becomes due

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Reduced or under payment

Reduced or under payment has been received

If you have received a reduced payment with no explanation such as a withholding notice, send letter 2a - Reduced payment to the contractor asking for an explanation of the amount that he considers due for payment and requesting a meeting.

Letter 2a - Reduced payment

Next steps

Contractor disagrees with valuation

If the contractor disagrees with the value of your work (e.g. his measurement of the amount of work completed by the valuation date is less than yours), you can either accept or dispute it. If you choose to dispute his valuation, you have a number of options.

Contractor is withholding payment

If the contractor is in agreement with the value of your work but states that he is ‘withholding’ an element of it (e.g. because he claims that some of your work was defective or you have delayed another sub-contractor), you should receive a withholding notice. If you have not received a withholding notice, you can issue notice of your intention to suspend work until full payment is received.

Contractor doesn’t respond at all

If you receive no response from the contractor at all and the outstanding payment is still not forthcoming, you can go to adjudication to obtain what you are owed.

How to get it right next time

1. Agree a default application process

If you can agree a default application process by incorporating the following clauses into your contract whereby the amount you apply for becomes due and payable in the event it is not contested by the contractor, you can obtain certainty of how much you are due for payment.

The sub-contractor shall make applications for payment at [monthly] intervals commencing one month after the commencement of the works [or start on site].
Not later than 5 days after the receipt of an application for payment, the contractor shall give a written notice specifying the amount for payment proposed to be made in respect of that application, the basis on which such amount is calculated and to what the amount relates and shall pay the amount proposed no later than the final date for payment. The amount so notified shall be the amount due.
Not later than 5 days before the final date for payment of an amount due pursuant to clause 2, or in the absence of a notice pursuant to clause 4, the contractor may give a written notice to the sub-contractor specifying any amount proposed to be withheld and/or deducted from that due amount, the ground or grounds for such withholding and/or deduction and the amount of withholding and/or deduction attributable to each ground.
Where the contractor does not give any written notice pursuant to clause 2 and/or clause 3, the amount stated in the application for payment shall become the sum due. The contractor shall pay the sub-contractor this amount by the final date for payment.
The final date for payment of an amount due for payment shall be <30> days from the date of receipt by the contractor of the sub-contractor’s application for payment.

2. Support your applications for payment

To make it difficult for the contractor to dispute or reduce your payment, you should always include as much information as possible to support the amount claimed. For example, it is a good idea to attach a schedule showing how individual items have been calculated.

For further tips for getting paid on time, download NSCC’s Top 10 Tips for Getting Paid on Time.

NSCC's Top 10 Tips for Getting Paid on Time

3. Chase before payment becomes due

Always try to determine the contractor’s intentions before your payment becomes due. If you receive a notice from the contractor detailing your proposed payment and you disagree with it, send letter 2b - Disputed payment notice to the contractor explaining why you disagree with it and requesting a meeting to discuss it.

Letter 2b - Disputed payment notice