When the payer stays silent

Most surveyors know what a payment notice is. Fewer have thought carefully about what happens when nobody serves one, which is a shame, because that is the situation the Act deals with most severely.

The ordinary sequence

Under section 110A, the payer, or a specified person such as the contract administrator, gives a payment notice not later than five days after the due date. It states the sum considered due and the basis of calculation. That sum becomes the notified sum, and section 111 requires it to be paid by the final date for payment unless a pay less notice follows.

The system assumes someone will engage with the application. Section 110B deals with what happens when nobody does.

The default notice

If the payer fails to give a payment notice in time, the payee may give one instead. It states the sum the payee considers due and the basis of calculation. That sum then becomes the notified sum.

The consequence is easy to state and unpleasant to experience. The payee's own figure becomes the sum that must be paid, subject only to a pay less notice served before its deadline.

Where the payee's application already complied with the requirements for a payment notice, the contract may treat that application itself as the default notice. Read your contract on this point rather than assuming a fresh document is needed, because it changes when the clock starts.

Why this catches out client-side surveyors

Nobody sets out to ignore an application. It happens because of how the work arrives.

An application lands by email during a week with two site visits and a final account meeting. It is read, mentally noted as roughly what was expected, and left for the valuation on Thursday. Thursday moves. The five days expire quietly, because nothing announces their expiry.

There is no alarm, no bounce, no reminder from the other side. The first sign is a notice from the contractor stating a sum you did not agree, followed by a conversation with your client about why the full amount now has to be paid.

Serving on time is not enough

A payment notice served within five days but stating only a figure has the same weakness as a bare pay less notice. It must set out the basis on which the sum is calculated. A notice that cannot be understood is a notice that can be challenged.

In practice the basis of calculation is already in your valuation. The measured work, the variations included, the materials on site, the retention deducted. The task is not to produce new reasoning, it is to attach the reasoning you already have to the notice you are serving.

Zero is a valid notice

A payment notice may state that nothing is due, provided it explains why. Surveyors sometimes hesitate over this, feeling that a nil notice is provocative. The alternative is worse. A nil notice with reasons is a document you can defend. Silence is a document the other side writes for you.

What good practice looks like

• Record the due date for every payment cycle at the start of the job, not when an application arrives
• Treat the payment notice deadline as a fixed obligation, independent of when you intend to do the valuation
• Serve the notice even when the figure is uncontroversial, because the deadline does not care whether you agree
• Attach the basis of calculation every time, in whatever form your valuation already produces
• Keep evidence of service with the notice itself

The whole of section 110B is avoidable by doing one thing on time, every cycle, on every job. That is an administrative problem, not a professional one, and it is the kind of problem that a diary held in someone's head solves right up until the week it does not.