Construction Demand Letter Template for England and Wales

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Key Requirements PROMPT example:

Construction Demand Letter

"I need a Construction Demand Letter to recover £250,000 in unpaid payments from ABC Developments Ltd for work completed on the Manchester Shopping Centre project, with a final payment deadline of March 15, 2025."

Document background
A Construction Demand Letter is employed when payment for construction work remains outstanding and formal action is required. It represents a critical step in the payment recovery process under English and Welsh construction law, typically issued after payment notices have been ignored and before initiating legal proceedings. The letter must detail the outstanding amount, payment terms, and relevant contractual provisions, while complying with the Construction Act and pre-action protocols. It serves both as a final demand for payment and potential evidence in subsequent legal proceedings.
Suggested Sections

1. Recipient Details: Full name and address of the recipient, including company registration details if applicable

2. Contract Reference: Details of the relevant construction contract including project name, contract date, and reference numbers

3. Outstanding Amount: Clear statement of the amount owed with breakdown if applicable

4. Payment History: Summary of relevant payment applications, certificates and current payment status

5. Demand Statement: Formal demand for payment with specified amount and deadline for payment

6. Legal Basis: Reference to relevant contract terms and statutory rights under construction legislation

Optional Sections

1. Interest Calculation: Details of statutory interest claims under the Late Payment of Commercial Debts (Interest) Act 1998

2. Threat of Legal Action: Statement of intended legal proceedings if payment is not received by the specified deadline

3. Right to Suspend: Notice of intention to suspend works under the Construction Act 2009

Suggested Schedules

1. Schedule 1 - Payment Applications: Copies of relevant payment applications and certificates

2. Schedule 2 - Contract Extracts: Relevant sections of the construction contract supporting the payment claim

3. Schedule 3 - Payment Records: Evidence of previous payments made and outstanding amounts

4. Schedule 4 - Interest Calculations: Detailed breakdown of interest calculations if statutory interest is being claimed

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Industries

Housing Grants, Construction and Regeneration Act 1996: Primary legislation governing construction contracts in England and Wales, including payment mechanisms and dispute resolution procedures. Amended by the Local Democracy, Economic Development and Construction Act 2009.

Construction Act 2009: Key legislation that updated the HGCRA 1996, introducing stricter payment provisions and making changes to adjudication procedures in construction contracts.

Limitation Act 1980: Establishes time limits for bringing different types of claims in construction disputes, including contractual and tortious claims.

Late Payment of Commercial Debts (Interest) Act 1998: Provides statutory right to claim interest on late payments in commercial transactions, including construction contracts.

Late Payment of Commercial Debts Regulations 2013: Sets fixed payment terms and maximum payment periods for commercial transactions, including rules about interest rates and compensation.

Scheme for Construction Contracts (England and Wales) Regulations 1998: Provides default payment and adjudication provisions that apply where construction contracts fail to comply with the Construction Act.

Scheme for Construction Contracts Amendment Regulations 2011: Updates to the original 1998 regulations, reflecting changes introduced by the Construction Act 2009.

JCT Terms: Standard form contracts published by the Joint Contracts Tribunal, widely used in the UK construction industry.

NEC Terms: New Engineering Contract suite of contracts, providing alternative standardized terms for construction projects.

FIDIC Terms: International Federation of Consulting Engineers contract terms, often used in international construction projects.

Pre-Action Protocol for Construction and Engineering Disputes: Procedural guidelines that parties should follow before commencing formal legal proceedings in construction disputes.

TCC Guidelines: Technology and Construction Court guidelines governing procedures for construction-related litigation in England and Wales.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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