Spec Finish

www.thefis.org 23 Finance However, one counter-argument often made is that the practice of retentions would need to be replaced by another method. Any replacement would also need to ensure work is completed to a required standard and within an agreed timescale. Recently, Helen Tapper, President of the FIS, led a call to arms, detailing the three steps she feels would help rebuild the construction sector⁶. Several other alternatives have been proposed as interim solutions, but FIS has outlined two for consideration⁴: • Retention Deposit Scheme – Peter Aldous MP proposed a Bill that the FIS was a leading and vocal supporter of. The Bill said that cash retentions should be held in trust accounts to protect the supply chain. • Retention Bonds – Retention Bonds are an alternative way of avoiding problems associated with retention recovery. Amounts that would have been held as retention are paid, and a bond is provided to secure the amount. Similar to retention, the bond’s value will usually reduce after the certification of practical completion. Top tips for construction retentions Whatever your thoughts may be, retentions are unlikely to disappear in the immediate future, meaning you may still wind up having to encounter them. So, what can you do to make this process as easy as possible⁷? We suggest the following steps: • Upon completion, be sure to notify your procuring contractor immediately. Doing so ensures that you have a set date to calculate the defects liability period, with no disputes on timings. • In your tracking system, note this completion date and use reminders to alert you when the defects liability period ends. • Request the release of your retention in writing – this will often be in the form of a payment application. • If a retention payment is not received, investigate the reasons behind this immediately. • Ensure you keep good records and copies of all correspondence, both sent and received. How to get the retention released In some cases, your retention may not be released. If you find yourself in this situation, you should follow these steps: • Firstly, always check the contract. If you are satisfied that you have achieved all the necessary stages to trigger the release of the retention and have followed the required process, the contractor could be in breach of contract. Ensure you check over all contract clauses carefully to ensure you have met all requirements, or you could be the one in breach of contract. • Send reminders directly, informing them that payment has not been made, despite all requirements being met. If deemed necessary, bypass administrative layers and speak directly with a decision-maker, such as the commercial manager or director. • Show your records of correspondence and proof of payment requests, and politely ask for the retention to be released immediately. Ensure they have all your bank details or provide them again if necessary. If the retention is still not released despite the above information being provided, you should consider further action. Options here may include court action or adjudication. You may also consider suspending works if a relevant ‘pay-less notice’ has not been issued as required by legislation. https://uk.payapps.com/ Above all, innovation Design Investment Sustainability zentia.com Above all, you 12162521 Zentia_Ads_Print_122x85mm Spec Finishes AW.indd 4 23/0 9/2021 17:23 FIND OUTMORE For more detailed information and advice, download our Retention eGuide at https://uk.payapps.com/blog/retention- eguide-managing-retention-how-to-get-it-back i ⁴ FIS PDF (https://www.thefis.org/fis-retentions-position-paper-2021/ ) ⁵ https://builduk.org/wp-content/uploads/2021/08/Roadmap-to-Zero- Retentions-August-2021.pdf ⁶ https://www.thefis.org/about-us/fis-campaigns/call-to-arms/ ⁷https://uk.payapps.com/blog/in-brief-how-to-manage-construction-retention