A Notice to Commence (NTC) is a formal communication from the Client to the Contractor stating the date the Contractor can begin work.
The reason NTC’s are so important is they confirm the date when the contract performance starts and therefore, they’re used to calculate the completion date and any important Sectional Completion dates in between.
It’s crucial that if the Contractor commences work, they do so under the conditions noted in the Contract and quite often this is not the case. We wanted to discuss some typical problems surrounding the NTC and give some tips to managing these.
1. What happens if I receive the NTC and Site isn’t ready?
The NTC is one of the most important documents a Contractor will accept on a project and once received, it’s paramount the Contractor verifies that, on the date of the commencement, all of the conditions – as promised under the Contract – are in place to ensure maximum productivity on site.
If they’re not, this will almost inevitably delay the Works and starting a project with delay and disruption from the outset is a recipe for disaster.
Most building contracts have a two-week window from receipt of the NTC to actually starting on site. During this period, it’s therefore paramount that the Contractor visits site to check the required conditions are in place.
The last thing the Contractor wants to be doing is starting the works and putting in a notice about something that is causing delays. So, when you receive the NTC, visit the site and respond to the letter confirming either:
- You’re happy to start and accept the date or,
- You’re concerned that the start date may not be achievable due to issues “x”, “y” and “z” and “can these be resolved?”.
Responding as above should allow any concerns to be resolved prior to commencement and if they’re not, will serve as a suitable Notice of a delay event. Either way, just accepting a NTC without verifying the conditions is a mistake.
2. What happens if the Notice to Commence is late?
Let’s say a Contractor is working on a Contract where the Commencement Date is 1.5 weeks away and the Contract says the Client must give 2 weeks’ NTC and they haven’t yet sent this – what does the Contractor do?
Most construction contracts state that the Contractor is required to give notice of a delay “as and when it becomes reasonably apparent”. Where the commencement date is 1.5 weeks away and the notice period is 2 weeks, it has become apparent that there is a delay and the Contractor should give notice.
To do so, all that is required is a simple note as below:
Under the Contract, [The Client] is required to give two weeks’ notice that we may commence the works on site. The date of possession noted in the Contract particulars is “x”, which means the Notice should have been received by “y” date.
We haven’t received this yet and are therefore unable to commence the works on the original date of possession. We therefore notify you that as a consequence of the notice to commence not being received, the date for completion may be delayed.
In doing the above, you will protect yourself from any delays and again, you will have provided suitable notice to cover yourself for any time and cost implications in the future.
As with everything, there is no magic formula for success. Our view however, is that everything comes back to Understanding the Contract. With a real understanding, you know the key issues and can act professionally when issues arise.
Completing a Contract Audit more often that not, drives success on your project. If you have and if you understand the contract, you should know immediately where to head to regarding the Notice to Commence.
If you have any questions or would like to receive a Notice to Commence template letter and/or response letter, please get in touch via email.