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NEC ECC: Can retention be held under NEC3 option X16 following defects sign off?

+2 votes
We are a contractor working under NEC3 ECC Option A. Our client (Employer) has a procedure which requires the signing the defects certificate before they accept handover but are still asking for 12 months retention of 10% under option X16. I believe this to be disallowed as X16 states that no retention is held after defects certificate is issued. Are there any other reasons for them to hold onto retention other than completion of the works and issue of defects certificate?
asked Oct 13, 2017 in NEC3 and NEC4 Contracts by Nigel   3

1 Answer

+2 votes
I think the answer is No.

Whatever procedure the Employer may have in place does not alter the way in which the contract obliges each Party to do, unless the contract was amended appropriately.

If you have a standard Option X16, then retention is halved at completion (within the next payment assessment) and is effectively 0% (nothing retained) when the Defects Certificate is issued.  It looks like you have a 12 month period between completion of the whole of the works and the issuing of the Defects Certificate.  This is only extended where a Defect is notified and the defects correction period runs past the 12 month date.

Any contract requirements that you may have with regard to 'handover' (Delivery Into Use, Bringing Into Service etc), is a separate contract procedure and should not be confused with the retention provisions under Option X16, which are very clear.
answered Oct 13, 2017 by Andrew WI (3,600 points)