Penalties for late construction site delivery explained by Alobees

Respecting deadlines is essential on a construction site. The project owner can use late payment penalties to stimulate businesses that do not deliver their works on time. Here are the important things you need to know about this topic.

The principle of late construction site delivery penalties

Late penalties allow the project owner to fine the company if the work is not completed on time.

Definition

The late payment penalty is a legal measure put in place to ensure the delivery of the work within the agreed deadlines between a customer and a service provider. They come into play when the contractor or the company does not respect the delivery deadline stipulated in the contract. The project owner is then entitled to claim Compensation for each day of delay.

The purpose of using late payment penalties is to push construction actors to respect their commitments. They offer protection for the project owner, which benefits from this right even in the absence of a specific clause in the contract.

Application

Allowances are applicable From the first day of delay, in order to reinforce the service provider's commitment to its deadlines. But in practice, late payment penalties are only used after 30 days.

Delays of less than 30 days are in fact not considered harmful and, therefore, do not give rise to compensation.

Some exceptions do not involve a penalty for late work on site

Although the law provides for late penalties after 30 days of overruns, some situations are an exception.

The bad weather

Bad weather is a major cause of exemption. They justify stopping the construction site and prevent the application of penalties, provided that that they are recognized by the Labor Code. A simple rain is not enough to invoke this exception. Only severe weather conditions allow the delivery time to be postponed.

Additional work

Additional work may also justify the cancellation of late penalties. They concern additions requested by the customer who:

• Were not provided for in the original quotation
• Are necessary for the conformity of the work.

It is important to draw up an amendment to the contract and to redefine the deadlines in writing to avoid misunderstandings.

The responsibility of the project owner

The responsibility of the customer can also cancel the penalties. If the delay results from an action or negligence on the part of the owner, such as an omission in administrative procedures or the non-payment of deposits, the provider is not required to pay compensation.

In the event of a work stoppage due to non-payment, a formal notice by registered letter is required fifteen days before the suspension of activities.

How are late penalties calculated?

The calculation of late penalties starts from the first day of overrun, although payment is required only after 30 days. The calculation rules vary according to the type of project:

• For private works contracts, the reference is the AFNOR NF P03-001 standard, article 9.5. It defines the terms and conditions for private markets, with the exception of single-family homes. Allowances are calculated in calendar days, at the rate of 1/1000th of the total cost of the project, with a ceiling of 5%.

For example, for a 300,000 euro construction site, the daily penalty is 300 euros, not exceeding 15,000 euros in total.

• In the case of single-family homes, it is the Construction and Housing Code (CCH) that applies. Penalties should be clearly stated in the contract. Here, the compensation is 1/3,000th of the total amount, or 100 euros per day for a 300,000 euros project.
• Finally, for public works, penalties are limited to 10% of the contract amount. For a 300,000 euro project, this means a maximum of 30,000 euros. Businesses will be exempt from these penalties if they do not exceed 1,000 euros excluding tax.

The buyer must inform the company of the compensation conditions envisaged, leaving time to react. These provisions are set out in the new CCAG (Cahiers of General Administrative Clauses).

What are the consequences of a disagreement on late penalties?

Faced with an unhappy customer, it is important for businesses to know their rights. Delays can in fact cause major inconveniences. And especially since the customer does not have to prove the damage suffered as a result of the delay of construction site delivery.

Our advice: finalize the work quickly and try to negotiate an amicable agreement. If your attempts at explanation or apology are not enough and the customer insists on penalties, you must comply with the procedures provided.

In case of Construction site dispute persistent, the project owner and the company have the opportunity to take the case to court. They can refer the matter to the local judge or to the District Court to assert their rights.

With Alobees, avoid construction site delays

Accessible on mobiles, tablets and PCs, Alobees is a software specifically dedicated to construction companies. It is an essential ally in meeting the deadlines of your projects. Here are some of its features:

• Document management: gather all your documents in one place, from prevention plans to meeting minutes and production plans.
• Off-road accessibility: connect from the construction site, the office, or on the go.
• Communication: facilitate exchanges thanks to dedicated sharing tools and project-based news feeds.
• Scheduling: organize your human and material resources according to your needs.
• Task tracking: monitor the progress of the work accurately.
• Intervention management: access your teams' agenda in real time and generate intervention reports.

Alobees is adapted to the needs of SMEs. The software can transform your construction site management, reduce the risk of delays and improve customer satisfaction. Try it free for 14 days and experience it.