Construction Subcontractor Agreement (UK)
England & Wales
This Construction Subcontractor Agreement (the “Subcontract”) is entered into on [Agreement Date] between:
[Principal Contractor Name] (Company No. [Principal Contractor Reg No.]), [Principal Contractor Type], with its registered or principal office at [Principal Contractor Address], [Principal Contractor City], [Principal Contractor County], [Principal Contractor Postcode], England and Wales (hereinafter referred to as the “Principal Contractor”); and
[Subcontractor Name] (Company No. [Subcontractor Reg No.]), [Subcontractor Type], with its registered or principal office at [Subcontractor Address], [Subcontractor City], [Subcontractor County], [Subcontractor Postcode], England and Wales (hereinafter referred to as the “Subcontractor”).
The Principal Contractor and the Subcontractor are referred to collectively as the “Parties” and individually as a “Party”.
BACKGROUND
(A) The Principal Contractor has been engaged by [Employer Name] (the “Employer”) to carry out construction works in connection with the following project: [Project Name] — [Project Description] (the “Project”).
(B) The Principal Contractor wishes to engage the Subcontractor to carry out the [Trade or Package] works package at the Site (the “Subcontract Works”), and the Subcontractor agrees to carry out those works on the terms and conditions of this Subcontract.
(C) The Parties acknowledge that this Subcontract is a ‘construction contract’ within the meaning of section 104 of the Housing Grants, Construction and Regeneration Act 1996 (as amended).
NOW, THEREFORE, in consideration of the mutual obligations set out herein, the Parties agree as follows:
1. DEFINITIONS
In this Subcontract:
“Completion Date” means [Completion Date], subject to any extension of time granted under clause 4 of this Subcontract.
“Commencement Date” means [Commencement Date].
“Project” means [Project Description].
“Site” means the site at [Site Address].
“Subcontract Works” means the [Trade or Package] works described in clause 2 of this Subcontract.
“Subcontract Price” means the amount specified in clause 3 of this Subcontract.
“Rectification Period” means [Rectification Period].
2. SCOPE OF SUBCONTRACT WORKS
2.1 The Subcontractor shall carry out and complete the Subcontract Works at the Site, as follows:
[Scope of Works]
2.2 The Subcontractor shall carry out the Subcontract Works in a good and workmanlike manner, using materials of adequate quality that are fit for their intended purpose, and in compliance with all applicable British Standards, codes of practice, and statutory requirements, including the Building Regulations 2010 (as amended) and the Construction (Design and Management) Regulations 2015 (CDM 2015).
2.3 Materials shall be supplied by [Materials Supply].
2.4 The Subcontractor shall not sub-subcontract any part of the Subcontract Works without the prior written consent of the Principal Contractor.
2.5 The Subcontractor shall comply with all reasonable instructions issued by the Principal Contractor or its authorised representative and shall attend all site meetings as required.
3. SUBCONTRACT PRICE AND PAYMENT
3.1 The Principal Contractor shall pay the Subcontractor [Subcontract Price] ([Price Type]) for the satisfactory completion of the Subcontract Works.
3.2 VAT: [VAT Treatment].
3.3 Payment shall be made on the following basis: [Payment Schedule], with the following payment due dates: [Payment Due Date].
3.4 The Parties acknowledge that this Subcontract is subject to the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), as amended by the Local Democracy, Economic Development and Construction Act 2009. Accordingly:
- the Principal Contractor shall issue a Payment Notice no later than 5 days after each payment due date, specifying the sum considered due and the basis of calculation (section 110A, HGCRA 1996);
- if the Principal Contractor intends to pay less than the sum stated in the Payment Notice, it shall serve a Pay Less Notice before the prescribed period before the final date for payment (section 111, HGCRA 1996);
- either Party may refer any payment dispute to adjudication at any time (section 108, HGCRA 1996); and
- the Principal Contractor shall not withhold payment by reason only that it has not been paid by the Employer (section 113, HGCRA 1996 — prohibition on ‘pay when paid’ clauses).
3.5 All payments shall be made in pounds sterling (£) by bank transfer to the Subcontractor’s nominated bank account. Any sum not paid by the final date for payment shall bear interest at 8% per annum above the Bank of England base rate under the Late Payment of Commercial Debts (Interest) Act 1998.
3.6 CIS Deductions. Payments under this Subcontract are subject to the Construction Industry Scheme (CIS) administered by HMRC pursuant to the Finance Act 2004. The Subcontractor’s CIS registration status is: [CIS Status] (UTR: [UTR]; HMRC Verification No.: [CIS Verification No.]). The Principal Contractor shall deduct tax at the rate confirmed by HMRC on verification and shall provide the Subcontractor with a monthly deduction statement.
4. PROGRAMME AND EXTENSION OF TIME
4.1 The Subcontractor shall commence the Subcontract Works on the Site on the Commencement Date and shall achieve practical completion of the Subcontract Works by the Completion Date.
4.2 The Subcontractor shall proceed regularly and diligently with the Subcontract Works and comply with the Principal Contractor’s site programme, method statements, and any reasonable programming requirements: [Programming Requirements].
4.3 The Subcontractor may apply in writing for an extension of the Completion Date where delays are caused by: (a) variations instructed in writing by the Principal Contractor; (b) delay caused by the Principal Contractor or others for whom it is responsible; (c) exceptionally adverse weather conditions; or (d) force majeure events beyond the Subcontractor’s reasonable control. The Subcontractor shall give written notice of the delay event and its cause as soon as reasonably practicable.
4.4 The Principal Contractor shall assess any application for extension of time fairly and shall notify the Subcontractor of its decision within a reasonable time.
5. RECTIFICATION OF DEFECTS
5.1 The Subcontractor warrants that the Subcontract Works shall be free from defects in workmanship and materials at the date of practical completion.
5.2 During the Rectification Period, the Subcontractor shall, upon written notice from the Principal Contractor, rectify at its own cost any defects, shrinkages, or other faults that appear in the Subcontract Works and are attributable to the Subcontractor’s failure to comply with its obligations under this Subcontract.
5.3 If the Subcontractor fails to commence rectification within 7 days of receiving written notice, or fails to proceed with rectification with due diligence, the Principal Contractor may employ others to rectify the defects and recover the reasonable cost of doing so from the Subcontractor or from any Retention held.
5.4 Practical completion of the Subcontract Works shall be certified in writing by the Principal Contractor when, in its reasonable opinion, the Subcontract Works are practically complete, free from patent defects, and all required documentation (O&M manuals, test certificates, as-built drawings) has been provided by the Subcontractor.
6. HEALTH AND SAFETY — CDM 2015
6.1 The Subcontractor shall comply with all applicable health and safety legislation, including the Health and Safety at Work etc. Act 1974, the Management of Health and Safety at Work Regulations 1999, and the Construction (Design and Management) Regulations 2015 (CDM 2015).
6.2 The Subcontractor shall: (a) plan, manage, monitor, and coordinate all health and safety matters relating to the Subcontract Works (CDM 2015, regulation 15); (b) comply with all directions given by the Principal Contractor as Principal Contractor for the purposes of CDM 2015; (c) cooperate with the Principal Contractor in preparing and maintaining the Construction Phase Plan; and (d) report any accident, near miss, or dangerous occurrence on the Site to the Principal Contractor immediately.
6.3 The Subcontractor shall ensure that all operatives employed by it on the Site hold valid CSCS cards or equivalent qualifications appropriate to their trade, and shall provide evidence of such qualifications to the Principal Contractor on request.
6.4 The Subcontractor shall prepare and submit to the Principal Contractor, prior to commencement on Site, a Risk Assessment and Method Statement (RAMS) for all aspects of the Subcontract Works, and shall not commence work until the RAMS have been approved in writing by the Principal Contractor.
7. INSURANCE
7.1 The Subcontractor shall maintain, at its own cost and throughout the duration of the Subcontract Works and the Rectification Period, the following insurances with a reputable insurer authorised to carry on business in the United Kingdom:
- public liability insurance with a minimum indemnity limit of [PL Insurance];
- employer’s liability insurance in accordance with the Employers’ Liability (Compulsory Insurance) Act 1969, where the Subcontractor employs workers; and
- professional indemnity insurance where the Subcontract Works involve design responsibilities, in an amount appropriate to the nature of the design.
7.2 The Subcontractor shall provide the Principal Contractor with copies of current insurance certificates within 7 days of a request.
8. INDEPENDENT CONTRACTOR
8.1 The Subcontractor is an independent contractor and is not an employee, worker, agent, or partner of the Principal Contractor. The Subcontractor is solely responsible for the management and control of its operatives, its tax and National Insurance affairs, and its compliance with HMRC requirements including the CIS.
8.2 Nothing in this Subcontract shall constitute or be deemed to constitute the Subcontractor as an employee, agent, or joint venturer of the Principal Contractor. The Subcontractor shall have no authority to enter into contracts or incur liabilities on behalf of the Principal Contractor.
9. VARIATIONS
9.1 The Principal Contractor may instruct variations to the Subcontract Works at any time before practical completion. All variation instructions must be given in writing. Oral instructions shall not be effective unless confirmed in writing by the Principal Contractor within 5 business days.
9.2 The value of variations shall be assessed by reference to the rates and prices in the Subcontract, or, where no applicable rate exists, at fair and reasonable rates agreed between the Parties or, failing agreement, as determined by an adjudicator.
9.3 The Subcontractor shall not carry out any variation without a written instruction from the Principal Contractor. Work carried out without authorisation may not be valued or paid for.
10. ADJUDICATION
10.1 Either Party has the right at any time to refer any dispute arising under or in connection with this Subcontract to adjudication under section 108 of the Housing Grants, Construction and Regeneration Act 1996 (as amended).
10.2 Where the Parties cannot agree on the appointment of an adjudicator, the adjudicator shall be appointed by the Royal Institution of Chartered Surveyors (RICS) or the Technology and Construction Solicitors’ Association (TeCSA), as nominated by the referring Party.
10.3 The adjudicator’s decision shall be binding on the Parties until the dispute is finally determined by legal proceedings, arbitration, or agreement. Enforcement of an adjudicator’s decision may be sought by way of summary judgment in the Technology and Construction Court.
11. GENERAL PROVISIONS
11.1 Entire Agreement. This Subcontract, together with any documents expressly incorporated by reference, constitutes the entire agreement between the Parties in relation to the Subcontract Works and supersedes all prior negotiations, tenders, and representations.
11.2 Amendments. No amendment to this Subcontract shall be effective unless made in writing and signed by duly authorised representatives of both Parties.
11.3 Third Party Rights. No third party shall have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Subcontract, except that the Employer may enforce the benefit of any warranty, performance obligation, or indemnity expressly granted for the Employer’s benefit.
11.4 Confidentiality. Each Party shall keep confidential the commercial terms of this Subcontract and any proprietary information of the other Party, and shall not disclose such information to any third party without prior written consent.
11.5 Assignment. The Subcontractor shall not assign its rights or obligations under this Subcontract without the prior written consent of the Principal Contractor.
12. GOVERNING LAW AND JURISDICTION
12.1 This Subcontract and any dispute or claim arising out of or in connection with it or its subject matter (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales.
12.2 Subject to clause 11 (Adjudication), each Party irrevocably agrees that the courts of England and Wales (in particular, the Technology and Construction Court) shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Subcontract.
IN WITNESS WHEREOF, the Parties have executed this Construction Subcontractor Agreement as of the date first written above.
PRINCIPAL CONTRACTOR
Name: [Principal Contractor Name]
Company No.: [Principal Contractor Reg No.]
Address: [Principal Contractor Address], [Principal Contractor City], [Principal Contractor County], [Principal Contractor Postcode]
SUBCONTRACTOR
Name: [Subcontractor Name]
Company No.: [Subcontractor Reg No.]
Address: [Subcontractor Address], [Subcontractor City], [Subcontractor County], [Subcontractor Postcode]
Principal Contractor
________________
Signature
Date: ________________
Subcontractor
________________
Signature
Date: ________________
What Is a Construction Subcontractor Agreement (UK)?
A Construction Subcontractor Agreement in the United Kingdom sets the scope of works, price, programme, and payment terms for the building or installation project, and takes its legal force from the Economic Development and Construction Act 2009.
The HGCRA 1996, as significantly amended by the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA 2009), is the foundation of UK construction payment law. It applies to any construction contract as defined in section 104 of the Act and creates mandatory rights in favour of both parties: the right to stage payments where the contract period exceeds 45 days; the obligation to issue Payment Notices and Pay Less Notices within prescribed time periods; the absolute right of either party to refer disputes to adjudication at any time; and the prohibition on ‘pay when paid’ clauses. Construction contracts that fail to include HGCRA-compliant payment terms are supplemented by the Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended).
The CDM 2015 impose specific health and safety duties on subcontractors as contractors under the Regulations. These include the duty to plan and manage the works safely, to comply with the Construction Phase Plan and the Principal Contractor’s directions, to confirm workers are competent and supervised, and to cooperate with the Principal Designer and Principal Contractor in maintaining the Health and Safety File.
The CIS, administered by HMRC under the Finance Act 2004, requires principal contractors to verify subcontractors’ CIS status and to deduct tax at source from payments for construction work at the applicable rate (0%, 20%, or 30%) as determined by HMRC verification.
Our Construction Subcontractor Agreement template is drafted specifically for use in England and Wales and covers all key legal requirements, including detailed scope of works, programme, subcontract price, payment provisions, CIS deductions, retention, liquidated damages for delay, a rectification period, CDM 2015 obligations, insurance requirements, variation provisions, and statutory adjudication rights.
The legal framework governing the Construction Subcontractor Agreement (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Construction Subcontractor Agreement (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2006 sets the foundational requirements.
When Do You Need a Construction Subcontractor Agreement (UK)?
A formal written Construction Subcontractor Agreement is essential whenever a principal contractor in England or Wales engages a subcontractor to carry out any part of a construction project, regardless of the size of the project or the trade involved. Proceeding on the basis of an oral instruction, a purchase order, or a letter of intent alone creates significant legal risk for both parties and may result in disputes over scope, payment, delay, and defects liability.
A Construction Subcontractor Agreement is needed in the following common circumstances: a principal contractor engaging a specialist trade subcontractor (such as a groundworker, steelwork erector, roofing contractor, mechanical and electrical engineer, or finishing contractor) to carry out a specific works package on a commercial, industrial, or residential development; a principal contractor on a housing development engaging separate subcontractors for the foundation, brickwork, roofing, internal fit-out, and landscaping packages; a civil engineering contractor engaging subcontractors for earthworks, drainage, piling, or road surfacing on an infrastructure project; and a specialist subcontractor sub-contracting part of its works package to a second-tier subcontractor (in which case the specialist becomes the ‘principal contractor’ for the purposes of the sub-subcontract).
A written agreement is especially important for CIS compliance. HMRC requires contractors to verify each subcontractor before making the first payment and to make deductions at the correct rate. A written subcontract that records the UTR, the HMRC verification number, and the CIS deduction rate applicable provides essential evidence of compliance in the event of an HMRC audit.
For projects to which CDM 2015 applies, the subcontractor’s health and safety obligations must be clearly set out in the subcontract. This is particularly important for notifiable projects (those expected to last more than 30 working days with more than 20 workers simultaneously, or to exceed 500 person-days), where the subcontractor must cooperate with the Principal Contractor on the Construction Phase Plan.
The domestic reverse charge for VAT also makes a written subcontract important, as both parties need to agree how the invoicing will be structured and to confirm that the subcontractor will not charge VAT on its invoices where the reverse charge applies.
What to Include in Your Construction Subcontractor Agreement (UK)
A thorough Construction Subcontractor Agreement for use in England and Wales should address the following key provisions.
Parties and Project Identification — Identify both parties by their full legal names, Companies House registration numbers, and registered or principal addresses. Identify the project by name and reference number, describe the project briefly, and specify the site address. Name the employer or developer if different from the principal contractor, so that the subcontractor understands the contractual chain within which it is operating.
Scope of Subcontract Works — Define the subcontract works package in detail. State the trade or package name (e.g. structural steelwork, roofing, mechanical and electrical). Describe the works with reference to drawings, specifications, and bills of quantities. Specify whether the subcontract is supply-and-fix, labour-only, or a design-and-build subcontract. Clarity about the scope avoids variation disputes and defines the boundary between the subcontractor’s obligations and those of the principal contractor.
CIS Compliance — Record the subcontractor’s CIS registration status, UTR number, and HMRC verification number. State the applicable deduction rate. Require the subcontractor to notify the principal contractor of any change in CIS status. Include the domestic reverse charge provision where applicable.
Programme and Completion — Specify the commencement date and completion date. Require the subcontractor to submit and comply with a programme and to proceed regularly and diligently. Include extension of time provisions for delay caused by the principal contractor, variations, exceptionally adverse weather, or force majeure events.
Subcontract Price and Payment — State the price (lump sum, remeasured, or cost-plus) and the payment schedule (monthly interim valuations, milestone payments, or single payment on completion). Include HGCRA-compliant payment notice and pay less notice provisions. Specify the final date for payment. Confirm VAT treatment, including domestic reverse charge where applicable. Apply the Late Payment of Commercial Debts (Interest) Act 1998 to overdue sums.
Retention — If included, specify the retention percentage (typically 3–5%), the conditions for release (e.g. 50% on practical completion, 50% on expiry of the rectification period), and the interest payable on late-released retention under the Late Payment of Commercial Debts (Interest) Act 1998.
Liquidated Damages — Specify the LAD rate as a genuine pre-estimate of loss for delay beyond the completion date. Confirm compliance with Cavendish Square Holding BV v Makdessi [2015] UKSC 67.
Rectification Period — Specify the period during which the subcontractor must rectify defects (typically 12 months from practical completion). Include the principal contractor’s right to employ others to rectify defects at the subcontractor’s cost if the subcontractor fails to do so.
CDM 2015 Obligations — Set out the subcontractor’s obligations as a contractor under CDM 2015, including the duty to comply with the Construction Phase Plan, submit RAMS before commencing work, confirm CSCS-carded operatives, and report accidents under RIDDOR.
Insurance — Require the subcontractor to maintain public liability insurance (minimum cover as specified), employer’s liability insurance under the Employers’ Liability (Compulsory Insurance) Act 1969, and, where applicable, Contractor’s All Risks (CAR) insurance and professional indemnity insurance.
Variations and Adjudication — Require all variations to be instructed in writing. Confirm the statutory right to refer disputes to adjudication under section 108 of the HGCRA 1996.
Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. The forms-legal.com Construction Subcontractor Agreement (UK) template covers the mandatory elements under Companies Act 2006.
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howpublished = {\url{https://forms-legal.com/uk/business/contracts/construction-subcontractor-agreement-uk}},
note = {Free legal document template. Based on Companies Act 2006}
}Also available for these jurisdictions:
Frequently Asked Questions
The VAT domestic reverse charge for construction and building services was introduced with effect from 1 March 2021. It applies to most supplies of standard-rated or reduced-rated construction services between VAT-registered businesses in the UK construction supply chain. Under the reverse charge, the recipient of the supply (the Principal Contractor) accounts for the output VAT due to HMRC, rather than the supplier (the Subcontractor). The Subcontractor does not charge VAT on its invoice but must annotate it to confirm that the domestic reverse charge applies and that the Principal Contractor is required to account for the VAT. The reverse charge applies where the supply is within the scope of the Construction Industry Scheme (CIS), both parties are VAT-registered, and the recipient is not an end user. It does not apply to supplies made to end users (such as residential occupiers who are not making onward supplies), connected parties who are part of a VAT group, or businesses that supply their own labour to other businesses for use under those businesses’ supervision (which would be a supply of staff rather than construction services). HMRC Notice 735 provides detailed guidance on the scope and application of the reverse charge.
A pay less notice is a formal written notice served by the paying party (the Principal Contractor) under section 111 of the Housing Grants, Construction and Regeneration Act 1996 (as amended). It enables the Principal Contractor to pay less than the sum stated in the Payment Notice (or the Subcontractor’s application for payment) for the relevant interim or final payment. The pay less notice must be served before the ‘prescribed period’ before the final date for payment — typically 7 days before the final date under most subcontracts, though the contract may specify a different period. The notice must state the sum the paying party considers due and the basis on which it has been calculated. A pay less notice served too late, or one that fails to state the basis of the reduced sum, is invalid. Where a valid pay less notice is not served, the Principal Contractor must pay the full notified sum by the final date for payment. If it fails to do so, the Subcontractor may: (a) refer the non-payment to adjudication under section 108 HGCRA 1996, which provides a right to a decision within 28 days; and (b) suspend performance of the Subcontract Works after giving 7 days’ written notice under section 112 HGCRA 1996, with the period of suspension treated as an extension of the Completion Date.
Yes, liquidated and ascertained damages (LAD) clauses are generally enforceable in UK construction subcontracts, provided the agreed rate is a genuine pre-estimate of the loss likely to be suffered as a result of the delay at the time the contract was made. The leading authority is Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, in which the Supreme Court reformulated the rule against penalties. The test is whether the clause is a secondary obligation that imposes a detriment on the party in breach out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation. In construction subcontracts, LAD clauses are routinely upheld by the courts and by adjudicators, provided they are clearly expressed, the rate was calculated by reference to an identifiable head of anticipated loss (such as the proportion of main contract LADs attributable to the subcontractor’s package), and the clause is triggered only upon the subcontractor’s culpable delay (not delay caused by the principal contractor’s instructions or other neutral events). Parties should also be aware that a LAD clause may become unenforceable if the Principal Contractor ‘time bars’ the Subcontractor — that is, prevents it from completing on time without granting an extension of time, in which case time may be said to be ‘at large’.
The Construction (Design and Management) Regulations 2015 (CDM 2015) apply to virtually all construction projects in Great Britain. As a contractor under CDM 2015, a subcontractor has the following statutory duties: to plan, manage, monitor, and coordinate construction work to confirm that it is carried out in a way that controls risks to health and safety, so far as is reasonably practicable (regulation 15(2)); to comply with the Construction Phase Plan and any health and safety directions issued by the Principal Contractor (regulation 15(9)); to confirm that its workers are competent, properly trained, and given adequate information, instruction, and supervision (regulation 15(7)); to cooperate with the Principal Designer and Principal Contractor in relation to the Health and Safety File; to report accidents, near misses, and dangerous occurrences under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR); and to provide the Principal Contractor with information for inclusion in the Construction Phase Plan and the Health and Safety File. Subcontractors with design responsibilities (such as a structural steelwork subcontractor who designs the steelwork) also have duties as designers under regulation 11 of CDM 2015, including the duty to eliminate or reduce foreseeable risks during construction, maintenance, and demolition.
Yes, retention deductions are a standard feature of UK construction subcontracts and are currently enforceable under English law, provided the retention clause complies with the mandatory payment provisions of the Housing Grants, Construction and Regeneration Act 1996 and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended). Retention is typically withheld at a rate of 3–5% of each interim payment as security for the subcontractor’s performance and to fund the rectification of defects. The standard practice is to release 50% of the retention on practical completion of the subcontract works and the remaining 50% on the expiry of the rectification period (or defects liability period). Unlike some other jurisdictions, England and Wales does not currently require retention funds to be held in a dedicated trust account. This means that if the principal contractor becomes insolvent before releasing the retention, the subcontractor is an unsecured creditor and may lose the withheld sums entirely. The Building Safety Act 2022 conferred powers on the Secretary of State to introduce mandatory retention deposit schemes, but as of 2025 no mandatory scheme has been brought into force. Subcontractors should take the risk of retention loss into account when pricing their work.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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