7/25/2017 Materials on site - Designing Buildings Wiki

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Last edited 10 Mar 2017

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Materials on site
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In very broad terms, on construction projects, materials are sourced by the contractor and the
Related articles
client pays the contractor after they have been delivered to site.
Advance payment bond.

Generally, the law considers that, unless the contract states otherwise, title (ownership) of Bills of quantities.

materials passes from the contractor to the client at the time of delivery, irrespective of whether Bonds and guarantees.
payment has been made. However, some forms of contract may state that ownership transfers Construction contract.
upon payment. It is important therefore that the intention of the parties is clear and that these
Contractor.
intentions cascade down through the contractual chain.
Interim valuation.

Lead times.
If delivered materials have been affixed to the land or incorporated into the building, then
ownership of the materials will transfer to the client even if they have not been paid for. If they Logistics management.

have not been affixed to the land, that is, they can be easily removed without damage to
themselves or their surroundings, but have been paid for, ownership only transfers to the client if
the contractor themselves had title and so were in a position to transfer it.

This situation is complicated by the fact that the client generally only pays the main contractor at
pre-agreed intervals, not every time something is delivered to site, and the complexity of the
contractual chain means that the client may pay the main contractor, who pays a sub-contractors,
who pays a supplier and so on.

This can put the actual supplier at risk, for example, if the contractor, or any intermediate part of
the supply chain defaults or becomes insolvent before payment is received. Depending on the
terms of the contract, if the contractor has delivered the materials and the client has received
them in good faith then ownership may be consider to have transferred to the client even if the
supplier has not been paid.

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A retention of title clause (Romalpa clause or reservation of title clause) allows a supplier to
retain ownership until specified conditions have been met, for example, until payment has been
made. This can override the general principle that title passes on delivery and can give an unpaid Clean indoor air for healthy living

suppliers title priority over the clients. However, there may be some risk to the client if they
accept such clauses, for example, if the supplier becomes insolvent, and the receiver attempts to
recover the materials. Standard fittings and stock items such as copper piping, electrical switches
and ironmongery are items that might be removed from the site following the first sign of
insolvency.

To be effective, the client must be aware of the retention of title. Furthermore, if the materials
have been incorporated into the works they will no longer be capable of repossession.

https://www.designingbuildings.co.uk/wiki/Materials_on_site 1/6
7/25/2017 Materials on site - Designing Buildings Wiki

Where the contract has terminated the supplier may be trespassing if they enter the site, and Read about the measures that can be taken by
committing theft if they remove materials. individuals to protect and minimise exposure to
outdoor sourced air pollution.

However, if the client subsequently installs materials to which they do not have title they may be
guilty of 'wrongful interference', even if they are acting in good faith.
Leasehold ban

Before certifying payment for materials therefore, it is very important to be clear where the title
lies. Consideration should also be given to whether materials are actually required at the time
they are delivered. There may be circumstances in which it is useful to receive delivery in
advance of the actual requirement (for example so that goods can be secured if supply is short,
or so that shipments can be combined to reduce costs), but this should not be used simply as a
mechanism to improve the contractors or suppliers cash flow.

It can sometimes be appropriate for the client to pay for items even though they remain off-site,
for example, where a contractor has made a large payment for plant or materials that have yet to
be delivered to site, or if the client wishes to reserve key items in order to protect the programme

Paying for off-site goods or materials can put the client at risk, for example if the contractor
Government announces leaseholds on new-
becomes insolvent and the items are then not delivered, even though payment has been made.
build houses will be banned.
There are a number of mechanisms for dealing with this risk, but none of them are completely
fool proof. See Off site materials for more information.

Crossrail 2
NB Project bank accounts (PBAs) have emerged as a means of enabling faster payments
through the construction supply chain, with payments being made direct to subcontractors and
suppliers as soon as 5 days from the due date.

Find out more

Related articles on Designing Buildings Wiki

Advance payment bond.
Bills of quantities.
Bonds and guarantees. Transport Secretary announces public
Construction contract. consultation into London's funding of Crossrail 2.
Contractor.
Interim valuation.
Lead times.
Logistics management. Architecture of concert stages
Materials.
Off site materials.
Project bank account.
Site office.
Site storage.
Suction lifter.
Retention of title.
Testing construction materials.
Vesting certificate.

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