The construction retention is open to abuse, and contractors are potentially missing out on millions of pounds of unpaid invoices.
As part of our partnership with Escalate, Bill Bordill explains why so many miss out and what to do if you’re struggling to get paid.
The mood at the Mipim conference, the global property industry’s annual networking event in Cannes, earlier this year was more subdued than usual. Delegates were well aware that predictions for the UK commercial and residential property market look weak at best. Indeed, a recent survey of the housing market by the Royal Institute of Chartered Surveyors concluded that prolonged Brexit uncertainty will likely cause further damage to the sector. The outlook is gloomy, even when viewed from the south of France.
As a result of lacklustre demand, it is reasonable to assume that residential developers might need to shave their prices to encourage sales – but they will be less keen to cut their margins. Similarly, commercial developers, especially local authorities, are under huge financial pressure currently and will be looking to cut expenditure. One obvious way to save money is not to pay a construction retention.
What are construction retentions?