The notified sum is the only number that matters

Section 111 of the Housing Grants, Construction and Regeneration Act 1996 says that the payer must pay the notified sum on or before the final date for payment. Not a fair sum, not the value of the work, not what the quantity surveyor calculated. The notified sum.

How the sum gets fixed

There are three routes, and only one of them applies on any given cycle.

• The payer issues a payment notice within five days of the due date. The sum in that notice is the notified sum.
• The payer issues nothing, and the contract allows the payee’s application to stand as a default payment notice. The sum in the application becomes the notified sum.
• The payer issues a pay less notice before the prescribed deadline. The notified sum is reduced to the sum in that notice.

Once fixed, the sum is due. The Act gives no route to revisit it for that cycle on the basis that it was too high.

Why this feels wrong the first time

Because it is not a valuation mechanism. It is a cash flow mechanism, and Parliament chose certainty over accuracy deliberately.

The reasoning is straightforward. Construction runs on payment down a chain, and a payer who can withhold pending an argument about value can stop the chain indefinitely. Fixing a sum by notice, with short deadlines, means the money moves and the argument happens separately.

The correction comes later

An overpayment in one cycle is not lost. Interim payments are on account, and the next valuation is cumulative, so an over-certification in month four is corrected by a lower gross figure in month five.

That is worth saying to a client who has just discovered they must pay a figure they consider too high. The money is not gone. It is early, and the correction is a month away, provided the notice goes out on time next cycle.

What breaks it

Missing the deadline. Both notices have short, strict windows and both are counted in a way that trips people up: the period begins on the day after the trigger date, and Christmas Day, Good Friday and bank holidays are excluded, but ordinary weekends are not.

Counting weekends out, which feels natural, produces a deadline several days later than the real one. By the time anyone notices, the notified sum has already been set by default.

The discipline

Diary the due date the moment the valuation cycle is agreed, and work every deadline from it. Issue the payment notice even when the figure is agreed and uncontroversial, because the habit is what protects you in the month when it is neither.

The cheapest notice you will ever send is the one you did not strictly need. The most expensive is the one that went out two days late.