Payment Claims & Variations
We assess payment claims and value variations against the contract, then recommend what to pay. The Construction Contracts Act sets a deadline for replying to a payment claim.
Overview
When you need payment claims and variations managed
We help with payment claims and variations on construction contracts. We check each claim against the contract, put a value on each variation, and recommend what to pay. Owners and developers can ask us to check a claim before they reply. Contractors can ask us to value a variation. This service is part of our post-contract quantity surveying work.
A payment claim is a written request for payment. The party asked to pay, called the payer, can pay the amount claimed or reply with a payment schedule. A payment schedule is a written reply that states what the payer proposes to pay and explains any difference from the claim.
A variation is a change to the work the contract covers, and it can change the price.
What we handle
What payment claims and variations work covers
Payment claims come in while a contract is under way, and they can include variations.
A claim can lead to disagreement over percentage complete (how much of the work is done), unfixed materials on site or dayworks.
Progress claim assessment
We check the detail of a claim against the contract and the records you send us.
Variation valuation
We value each variation, whether it appears in a claim or comes as a separate instruction.
Variation register
A variation register lists each change to the contract and where it stands: instructed, priced or agreed. Claims are easier to assess when the variations in them can be traced.
Retention
Retention is money withheld from a payment as security. When we assess a claim, we check the retention amount against the contract.
In New Zealand
When a payment schedule is due
A contract can set the time allowed for a payment schedule. Where it doesn't, the Construction Contracts Act 2002 sets a fallback of 20 working days after the claim is served.
The 20 working days count from when the claim is served, not from the date printed on it. Working days leave out weekends, public holidays and provincial anniversary days. For these deadlines, they also leave out the period from 24 December to 5 January.
NZS 3910:2023 is a contract standard for construction projects of any size. If your contract is based on a standard such as NZS 3910, check what your contract says about payment timing.
What you get
A payment recommendation you can work from
You get our recommendation on what should be paid, taking into account any variations in the claim. If you're the payer, you can use it as a starting point when you prepare your payment schedule.
Variation amounts in a payment schedule
Including a variation in a payment schedule doesn't mean its value has been agreed. Until the value is settled, treat the scheduled amount as provisional.
Who this is for
This service is for property owners and developers who want a claim checked before they respond.
It's also for main contractors and subcontractors with a claim or variation to be valued.
This work sits alongside our contract administration service. Where a claim or variation can't be agreed, our disputes and final accounts service may be the next step.
How it works
How a claim or variation assessment works
- 01
Send it through
Send us the claim, the contract, or the variation instruction.
- 02
We assess it
We check the claim and any variations.
- 03
Variations valued
We work out what each variation is worth.
- 04
Recommendation made
You get our payment recommendation.
Why AMS
How we handle payment claims and variations
Time to check the claim
The sooner you send us a claim, the more time we have to assess it before your reply is due.
Scope checked first
We check whether the work is already covered by the contract before we value it, so you know what you're paying for.
Projects anywhere in New Zealand
Because we work from the documents you send, you can bring us in on a project anywhere in the country.
Frequently asked questions
What happens if I miss the deadline to respond to a payment claim?
You become liable to pay the claimed amount on the due date. That's the Construction Contracts Act's rule when a payer doesn't provide a payment schedule in time. If you then don't pay by that date, the party claiming can recover the unpaid amount in court as a debt. The court can also award the actual and reasonable costs of recovery.
What makes a payment claim valid?
Under the Construction Contracts Act, a valid payment claim must include certain details and be served with Form 1. The claim must be in writing and identify the contract, the work and the period it covers. It must state the amount claimed, how it was worked out and the due date. It must also say it's made under the Act. Form 1 is an official notice that tells the payer how to respond and what happens if they don't. This is a summary, not legal advice.
How do you value a variation?
We follow what your signed contract says about valuing variations, because wording differs between contracts. Where a contract sets no price or rates, the Construction Contracts Act's default is the reasonable value of the variation.
Is all extra work a variation?
No, because work that looks like an addition can turn out to be inside the original scope. If extra work goes ahead with no record of who instructed it, it can be hard to agree whether it's a variation. Some contracts require the contractor to give notice within a set time if they consider work to be a variation.
How does retention get calculated and released?
Your contract sets how much retention is held and the terms for releasing it. The Construction Contracts Act also sets retention rules for commercial construction contracts. These rules don't apply where one of the parties is a residential occupier, such as a homeowner. The rules were amended on 5 October 2023. The amended rules apply to contracts entered into after that date, and to older ones renewed afterwards. Retention money is held on trust, and the party holding it must report on it to the party owed the money. A contract term is void if it makes release depend on anything other than the party owed the money performing its obligations.
Need a quantity surveyor for your next project?
Send through your plans or a short description of the project and we will come back to you.