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Types of Payment Certificates in Construction

what is a payment certificate

A construction project involves many various parties such as funder, employers, main contractors, subcontractors, sub-subcontractors, and suppliers. Payment processing is vitally important and difficult between participating parties so there are many different payment arrangements used during construction projects.

Payment Certificates result in payment being made by the client to the contractor. Generally, payment certificates can either be issued regularly during the course of the works, such as interim certificates (normally issued monthly) or may signify that a particular stage has been achieved, such as practical completion.

Construction Payment Certificates

  • Interim certificates
  • Certificate of practical completion
  • Certificate of making good defects.
  • Certificate of non-completion.
  • Final certificate.
  • There may also be testing certificates for works and activities such as commissioning, electrical work, sprinkler systems, building regulations, concrete cube crushing, cladding mockups and so on.

Payment of the valuation will be made on the issue of certificates during the course of the work until practical completion, following which a further certificate may be issued to release outstanding monies (including one-half of the retention held). Thereafter the contractor or subcontractor will submit a final account to the employer’s architect, contract administrator or quantity surveyor
or main contractor and a reconciliation of the contract sum will be made, replacing value submitted during the progress of the work with actual values expended. This will also involve the adjustment of any provisional sums or approximate quantities that had been allowed.

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