Tackling late payment must not come at the expense of building safety
Summary
The article argues that reforms to late payment in construction should distinguish between unlawful late payment and legitimate retentions. It warns that a blanket ban on retentions could undermine building quality, complicate payment structures, and create delays in higher-risk residential projects, including gateway three approvals under the building safety regime.
Why it matters
Residential property surveyors involved in development, defect resolution and building safety need to understand how payment reform could affect project completion, snagging, and post-completion engagement by contractors. The issue is particularly relevant on higher-risk residential buildings where retention mechanisms may support compliance and timely regulatory sign-off.
Key points
- The Commercial Payments Bill has reached committee stage in the House of Lords.
- The article distinguishes late payment from legitimate retentions tied to unfinished defects or snagging.
- A blanket ban on retentions could reduce incentives to complete remedial works and affect building safety outcomes.
- On higher-risk residential buildings, retention payments may help secure contractor input during gateway three.
- Alternative mechanisms such as guarantees or bonds may not be suitable or available in all cases.
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