81%
of clients in Scotland rely on retentions compared to 65% in England
not intended to be a convenient pot of money to use for whatever purpose deemed appropriate by the party withholding them. After all, retentions are still owned by the contractor from whom they have been deducted. The case is between D R Jones
Yeovil Ltd, a contractor, and The Stepping Stone Group Ltd, a property developer. Yeovil had issued proceedings to
recover the fi nal part of retention monies owing on contracts to build assisted living units. The contracts were JCT contracts, published in Scotland by the Scottish Building Contract Committee. The 12-month rectifi cation period, or defects liability period, had expired. But the client had never issued a making good certifi cate, even though there were no outstanding defects notifi ed during that period. The contractor complained that the developer had “raised a series of after-the-event, ever-changing and meritless points in an endeavour to resist paying the balance of retention properly due”. The developer argued that it had a counter-claim in respect of alleged defects which had not arisen during the rectifi cation period. Moreover,
82%
of Tier 1 contractors use retentions as part of their working capital
since a making good certifi cate had not been issued, the developer was not bound to release the monies. The court ordered the developer to release the outstanding retentions. Withholding of retentions was
governed strictly by the terms of the contract. Unless there were outstanding defects notifi ed during the rectifi cation period, which had not been made good, a client was bound to issue the certifi cate. It couldn’t refuse to release the monies on the grounds that it had some other claim against the contractor, e.g. liquidated damages.
Insisting on release of sub-contract retentions A Tier 1 contractor may say that your retentions cannot be released because
of problems with other trades. Such an excuse should not be allowed to hold up the release of your retention. You have every right to insist it is released at the end of your sub-contract rectifi cation period, or defects liability period. Furthermore, a Tier 1 contractor cannot delay release of your monies because a certifi cate of making good has not been issued under the main contract. It is illegal to insist on a pay-when-certifi ed provision.
GOT A QUESTION FOR RUDI? If you are having problems regarding release of retentions, or have another query you
would like Rudi to help with, please email
iain.mason@
select.org.uk
CABLEtalk JUNE/JULY 2021 35
WATCH NOW
Watch Rudi’s new videos for contract documentation and ‘battle of the forms’ at
bit.ly/SELECT-TV
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56
