Owners: Take Notice of the Notice of Non-Payment

“But the payment certifier hasn’t approved the invoice yet” is no longer a reason for an owner to refuse to pay a contractor’s proper invoice.

Any owner must pay a contractor within 28 days of receiving the contractor’s proper invoice, unless the owner gives the contractor a Notice of Non-Payment within 14 calendar days of receiving the proper invoice.

The Notice of Non-Payment is a statutory form, linked here: Form 1.1 - Notice of Non-Payment

An owner should give a contractor a Notice of Non-Payment if it does not want to pay all or part of the proper invoice and if it has some good reason to dispute payment of the full proper invoice. In the Notice of Non-Payment, the owner must set out the amount it is not paying, whether it is disputing the all or part of the invoice, detail the reasons for non-payment.

There are consequences if an owner does not give a Notice of Non-Payment and does not pay the contractor within 28 days. A contractor may seek payment through the adjudication process. If successful, the contractor will be awarded the full amount of the proper invoice and interest. While there have been no reported court decisions on the Notice of Non-Payment requirements of the Construction Act, the early trends from decisions about adjudication suggest that the courts will strictly enforce the prompt payment provisions of the Construction Act.

The information contained in this article is not legal advice.

If you are interested in what a proper invoice is, please check out our previous article Prompt Payment: What's so "proper" about an invoice?