Payment in JCT Design and Build

Following practical completion of the works the contractor is to submit a final statement to the employer for his or her agreement (clause 4.12).

If the contractor does not submit the final statement within 3 months of practical completion the employer can give a notice in writing to the contractor stating that if the final statement is not submitted within 2 months of the notice the employer may prepare these documents (the employer's final statement).

The final statement must contain the contract sum, as adjusted, less the sums already paid to the contractor. The due date for final payment shall be one month from whichever is the later of:

• the end of the rectification period;
• the date named in the notice of completion of making good; or
• the date of submission of the final statement to, or from, the employer.

Except if, prior to the due date for final payment, either the employer or contractor gives notice to the other party that they dispute the final statement then the relevant statement shall become conclusive as to the sum due. The final date for payment of the balance is 28 days from the due date.

As with the procedure for interim payments, not later than 5 days after the date due the payer shall issue a payment notice informing the payee of the sum he or she intends to pay. If the payer subsequently intends to pay less than the sum contained within the payment notice then the payer must issue a pay less notice not later than 5 days before the final date for payment.

Retention

Clause 4.14 permits the employer to deduct and retain a percentage of the amount due to the contractor at the rate set in the contract particulars (the retention percentage). The retention is held as security for the completion of the works and remedy of any defects.

The employer is to hold the retention as a fiduciary, for the benefit of the contractor, but where the contractor so requests the employer must place the retention fund into a separate account.

At the time of each interim payment the money is to be placed into the employer's account by the employer who is to inform the contractor accordingly. The employer is entitled to any interest that accrues on the retention while it is held in the account.

Upon practical completion, half of the retention fund, will be released to the contractor with the remainder to be held until a conclusive final certificate removing further responsibility for defects is issued.