51948
Description
Mind Map by alison_patey0437, updated more than 1 year ago
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Created by alison_patey0437
over 11 years ago
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Contract Practice -
Interim Valuations &
Payment Privisions
- Valuations
- Purpose?
- To provide recommendation to
certifier on value to them 2 issue
thier interim cert.
- To provide recommendation to
certifier on value to them 2 issue
thier interim cert.
- the Construction Act Relevant?
- Purpose?
- Retention
- JCT Rules
- rtn = certified amount retained by client
- % stated in approx - usually 5%
- Held on wrk executed
- material off site, measured works,
listed items, materials on site etc.
- NOT:
- restoration of loss or damage
- statutory fees/ charges
- L&E
- Fluctuations
- cost of emp. MG defects
- opening up 4 inspection
- restoration of loss or damage
- material off site, measured works,
listed items, materials on site etc.
- PC 1/2 is relased
- Emp. gains interest from retention & can keep it
- must be placed into a seperate bank account if specified by MC
- statement of retention must be issued
to MC with each interim cert.
- Balance of retention release on issue of certificate of Making Good
- rtn = certified amount retained by client
- why?
- provide degree of security 4 client
- intended 2 provide funds should issues
become apparent e.g. insolvency of MC
- provide incentive to ensure defects are MG
- provide degree of security 4 client
- Weaknesses?
- cost easily be greater
than 2.5% or 1.5%
- sets precedence 2
accept defects &
snagging
- retention often not
treated properly by emp.
- cost easily be greater
than 2.5% or 1.5%
- Retention Bonds
- What
- some sectors such as lifts &
piling will not accept costs feat.
retention but offer bonds in lieu
- form of on demand bond
- inc consideration - in lieu of retention
- remains in force until end of defects period
- provided by bank/ guarantor
- some sectors such as lifts &
piling will not accept costs feat.
retention but offer bonds in lieu
- ADVANTAGES:
- assignable
- latham report = retention bonds are a better
option than normal retention
- can provide same level of security as interim retention
- does not inflict cashflow problems
- ease MC could b passed onto tender prices
- assignable
- DISADVANTAGES:
- only advantage over suing if MC goes bust
- not ready access 2 the money
as with interim retention
- only advantage over suing if MC goes bust
- Types
- its conditional and to enforce you must;
- prove MC default of obs
- prove beneficiary has sustained damages
- prove that damage has been reasonably sustained
- prove MC default of obs
- its conditional and to enforce you must;
- Terms of bond
- immediate in insolvency
- payable if MC not performed obligations
- expires after completion of rectification of defects
- immediate in insolvency
- What
- JCT Rules
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