Certificate for payment

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Certificate for payment is an important document signed by few authorized people, which informes the general contractor, that the project has been completed and the owner is required to pay.

Content of the document

Certificate for payment is a very extensive document. It is not allowed to omit any information, because each information is crucial. In the Internet, there are some templates, where everyone can check, what data are included. Relying on one of them, it is possible to distinguish[1]:

  • Information section - which includes data of: owner, contractor, architect, contract date, invoice and a certificate number, project - it's name, dates and number,
  • Application for payment - a place where contractor gives the original construct sum, if there were any changes in the amount or if any additional expenses - information should also found in this section, than information about any payments in advance, previous payments (if they occurred), taxes amount, and, the most important - current payment due
  • Architect's certificate for payment - the most important part of the document, where architect is confirming, that the project has been 100% completed in accordance with contract details in agreed quality, also, that he observed the progress of work. Finally, that to his best knowledge, everything was completed correctly, and he authorize the sum required to pay by the owner,
  • Sometimes, there are also some attachments including cost statements and other information, which may be found as crucial by the owner. It's not commanded, but it is a good practise.

Validating document

There is one person, who is authorized to sign a certificate for payment. Usually, he should be mentioned in project's general regulations[2]. Without his signature, document is not valid[3]! And this is architect. He is the one, who takes responsibility for the quality and level of completing the project. He also determines the amount which owner has to pay for general constructor. The amount may be the same as the one given by the constructor, but it may be different, and than architect has to give exhaustive explanations, and attach them to the certificate for payment.

Mobile certificates

It is also possible to have a mobile version of certificate for payment. Nowadays not many people use paper documents, majority don't even use computers - they prefer smartphones. Technology meets the businessman's expectations here, however specific software is necessary [4]. It automatically gives the number to the certificate, and it's impossible to change anything in the document. That's way this mobile method becomes more and more popular - because of convenience and authenticity.

Examples of Certificate for payment

  • A Certificate for Payment is typically issued by the owner of a project, such as a builder or contractor, to the general contractor when the project is completed and ready for payment. This document is signed by the owner and the general contractor, confirming that all the work has been completed and that the owner is required to pay the contractor in full.
  • A Certificate for Payment is also issued by a bank or lender to a borrower when a loan is paid in full. This document is signed by the bank or lender and the borrower and confirms that the loan is paid and that the bank or lender does not owe the borrower any money.
  • A Certificate for Payment is also issued to a tenant when they have paid the full rent for a certain period of time. This document is signed by the tenant and the landlord, confirming that the tenant has paid the full rent and that the landlord does not owe the tenant any money.

Advantages of Certificate for payment

A certificate for payment is an important document that serves as proof of a completed project and is signed by authorized people. It is beneficial for both the contractor and the owner as it serves as a legal document and provides several advantages:

  • It serves as proof of the completion of the project and the payment that must be made, as well as provides a timeline for the payment.
  • It can also be used to track payments and enforce payment if it is not received in a timely manner.
  • It also helps to avoid disputes between the contractor and the owner by providing a written agreement that both parties must abide by.
  • It allows the contractor to request payments more quickly and allows the owner to keep track of their expenses.
  • It also helps to minimize the risk of fraud, as it provides a written agreement that both parties must follow.

Limitations of Certificate for payment

A certificate for payment is an important document that confirms that a project has been completed and the owner is required to make payment. However, there are certain limitations to a certificate for payment that should be noted, including:

  • The certificate has to be signed by the owner and the contractor, or by the contractor and an authorized representative of the owner.
  • The certificate can only be issued after the work has been completed and inspected.
  • The certificate should specify the amount to be paid and the payment terms.
  • The certificate should detail any deductions that the owner is entitled to make from the total payment amount.
  • The certificate should also include the contractor’s statement that the work has been completed in accordance with the contract.
  • The certificate should also include a statement from the owner that they accept the work as complete.
  • The certificate should also include any other pertinent information about the project such as the start and completion dates, and any other relevant details.

Other approaches related to Certificate for payment

A Certificate for payment is an important document that confirms the completion of a project and outlines the amount that is due to the contractor. Here are some other approaches to ensure payment for a project:

  • A Payment Bond: This is a surety bond guaranteeing that the contractor will be paid for the work they do. It is usually requested by the owner and guarantees that the contractor will receive payment even if the owner defaults on their payments.
  • A Retainage: This is a portion of the contract price that is withheld by the owner until the job is completed. The amount is typically 10% of the total contract price and can be used to cover any additional costs incurred during the project.
  • A Mechanics Lien: This is a legal document that provides a financial security interest in a project. It can be used by a contractor to secure payment from the owner if they fail to pay.

In summary, there are several approaches to ensure payment for a project. A Certificate for Payment is an important document that ensures payment and outlines the amount that is due to the contractor. Other approaches include a Payment Bond, a Retainage, and a Mechanics Lien.

Footnotes

  1. ↑ F Contractor, 2013, p.1-4
  2. ↑ Omansky A. H., Kanner J. L., 2013, p.8-10
  3. ↑ Omansky A., Kanner J. L., 2011, p. 9-12
  4. ↑ Chang T., 2014, p. 1-14


Certificate for payment — recommended articles
Interim certificate — Retention money — Indemnity bond — Retention bond — Certificate of substantial completion — Consent order — Cheque requisition — Debit Note — Delivery Notice

References

Author: Anna Włodarczyk

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