Can you explain what an interim application is in the context of a construction project
Interim applications are a formal request made by the contractor or subcontractor to the employer or general contractor a request for an interim payment for the value of work completed to the IVD, before the final account is agreed.
What information is typically included in an interim application under a construction contract?
Details work and entitlement up to date of the interim valuation date.
Must include
- Gross Valuation and Net Valuation
- Details showing how the sum has been calculated
- Deduction of Retention
- Deduction of Advanced Payment
-Deduction of the sum of previous certificates and any other payments sinced.
When is an Interim Application Made
The interim application is made on or before the stated interim valuation date stated in the contract
Why are interim payments required under UK Legislation
Under the housing grants and regeneration act 1996, any project in excess of 45 days is mandated to impose interim / stage payments as it is unreasonable for a contractor to finance the whole project.
What is the interim valuation date
The interim valuation date is a pre agreed date stated in the contract particulars which defines the cut off date for the QS/CA to value the works or materials on site to determine the interim payment.
In the case where no interim valuation date is stated within the contract particulars, under the SBC, the IVD will start a month from the date of possession.
Explain the Interim Payment Process
Under the SBC 2014,
- The GC is to submit their interim application along with a payment notice on or before the Interim Valuation Date.
- The CA must issue the payment certificate 5 days from the due date.
- The due date occurs 7 days after the Interim Valaution Date.
-The Final Payment occurs 14 days from the due date
- The CA/QS has opportunity to issue a pay less notice 5 days prior to to the final payment date if the QS feels less is owed then what is stated in the payment notice.
