Construction Act
The client lives in the house. Do your payment rights still apply?
Half this series describes machinery from the Construction Act: notified sums, pay less notices, suspension, adjudication. Here is the uncomfortable footnote in full: on a job for the person living in the property, almost none of it applies, and a builder who quotes the Act at a homeowner is quoting a law that excluded them.
QScope Team·25 February 2026·5 min read
The Housing Grants, Construction and Regeneration Act 1996 covers construction contracts broadly (sections 104 and 105 set the scope, with their own list of excluded operations). Then section 106 removes one huge category: a construction contract with a residential occupier, one which principally relates to operations on a dwelling which one of the parties occupies, or intends to occupy, as their residence. That is the extension, the loft, the refurbishment for the family living there: the bread and butter of small building.
What disappears on a residential occupier job
- The notified sum regime. No statutory payment notices, no payee default notice, no rule that a missed pay less notice makes your figure payable (section 111 machinery). The missed-deadline claim does not exist here.
- Statutory suspension. The right to stop work on seven days notice is the Act’s (section 112); without it, downing tools is governed by your contract and general law, and is riskier.
- Statutory adjudication. The 28-day dispute route (section 108) is the biggest loss: no fast forum, so the letter before action and the county court become the escalation path.
- The statutory right to stage payments on longer jobs (section 109), covered on its own page.
What survives, and it is more than people think
Your contract survives, entire. Every date, stage payment, variation procedure and interest clause you wrote in binds exactly as written, which is why on domestic work the quote is the whole legal system and the forms built for homeowner jobs earn their keep. General contract law survives: work done under a contract must be paid for, and an unpaid bill is an enforceable debt. What changes is the toolbox, not the debt.
Two consumer-law notes, because they now run the show: terms you drafted are read against you where ambiguous, and clauses in your standard terms face the fairness test under the Consumer Rights Act 2015, a reasonable interest or deposit clause stands, a punitive one is struck out and leaves nothing behind.
The boundary cases worth knowing
The exclusion turns on the client occupying or intending to occupy the dwelling as their residence. A landlord refurbishing a flat to let it is generally not a residential occupier; nor is a developer, or a company client, and mixed cases turn on what the contract principally relates to. So the same extension can be an Act job or not depending on who signed and why they own the house, worth establishing at quote stage, because it decides which half of this series applies to the job.
What to do this week
1. Sort your live jobs into the two boxes: Act or residential occupier. Ten seconds each, and it tells you which pages of this series to believe for each job.
2. On the domestic ones, put the machinery in the contract: stage payments with dates, a modest interest clause, the optional adjudication where your form offers it.
3. Stop citing the Act in letters to homeowners. It reads as strong and is checkably wrong, and one checkably wrong claim costs the credibility of everything else in the letter.
Where the information stops
Whether a particular client is a residential occupier on the boundary cases, the landlord who might move in, the mixed-use building, is a legal question the courts have actually had to untangle; if serious money turns on which box the job is in, get an hour of advice before you pick your machinery, not after you have relied on the wrong one.