Quick answer
A maintenance and renewal contract runs on a handful of standard commercial terms, and knowing them is what protects you as the client. Retentions hold back a small percentage of each payment until the work is proven, released in stages at practical completion and again at the end of the defects period. Payment runs on progress claims under the Construction Contracts Act 2002: the contractor claims for work actually done, you certify and pay to an agreed schedule. Provisional and prime-cost sums are honest allowances for scope that cannot be pinned down until a unit is opened up, and they are reconciled to the real cost. Variations are changes, priced and approved before the work rather than argued after it. A response SLA sets how fast the contractor attends and rectifies, by priority. And practical completion starts a defects period, usually twelve months, during which the contractor comes back and puts right anything that was their workmanship. None of it is exotic. It is the plumbing of a fair contract, and every term is there for a reason.
Retention protects you right through to the 12-month mark.
Key points
- Retentions hold a small percentage back until the work is proven, so you are never fully paid up on work that has not been checked.
- Payment is by progress claim under the Construction Contracts Act 2002: you pay for work done, certified against the schedule, not up front.
- Provisional and prime-cost sums are labelled allowances for scope you cannot see yet, reconciled to the real cost rather than left vague.
- Variations are priced and approved before the work, so the final account matches the contract with no end-of-job surprises.
- A response SLA sets attend and rectify times by priority, so an urgent fault is not treated like a routine one.
- Practical completion starts the 12-month defects period, during which the contractor returns and fixes their own workmanship at no cost.
For a housing provider, a retirement-village operator or a body corporate, the price on a maintenance tender is only half the decision. The other half is the terms: how you pay, what is held back, who carries the risk when scope changes, and what happens when something goes wrong after the crew has left. Good terms are not there to catch the contractor out. They are there so both sides know exactly where they stand, and so you are never exposed. Here is what each of the main ones does, and what to check before you sign.
Retentions: money held until the work is proven
A retention is a percentage of each payment, held back rather than paid, as security that the work will be completed and any defects fixed. It is typically a modest percentage of the contract value up to a cap, released in stages: part at practical completion, the balance at the end of the defects period. Since the 2017 and 2023 amendments to the Construction Contracts Act 2002, retention money on commercial construction must be held on trust and is protected if the contractor fails, so it is genuinely your security, not a loan to the builder. What to check: the percentage, the cap, and the release milestones. A retention you never see released is not a term, it is a trap, so the release triggers should be written plainly.
Payment: progress claims under the Construction Contracts Act
On a renewal programme you do not pay for the whole job up front, and you do not pay at the end either. You pay in stages against work actually done. The contractor submits a payment claim, you respond with a payment schedule certifying what you agree to pay, and payment follows to the agreed timetable. This is the default regime under the Construction Contracts Act 2002, and it protects both sides: the contractor is paid for progress, and you never pay ahead of the work. For a portfolio, claims are usually tied to units completed and signed off, which is the same logic as our deposits and progress payments on a single kitchen, scaled up to a programme.
Provisional and prime-cost sums: honest allowances
Some scope cannot be priced exactly until it is opened up. You do not know what is behind a 30-year-old benchtop or under a sink until the strip-out, and a fixed price for the unknown is either padded or wrong. A provisional sum is a labelled allowance for work whose extent is not yet clear; a prime-cost (PC) sum is an allowance for an item, like a specific appliance, chosen later. The honest way to handle them is to show them as allowances, then reconcile to the real cost when the work is done, with the difference credited or charged. What to check: that the allowances are itemised and reconciled, not folded into a lump sum you can never audit.
Variations: changes priced before, not after
A variation is a change to the agreed scope: extra work found on site, a spec upgrade you request, a unit that turns out to need more than the others. The rule that keeps a final account clean is simple: variations are priced and approved before the work is done, in writing, against the contract rates. That way the extra is a decision you make with the number in front of you, not a line item you discover on the invoice. This is also why the invoice should reconcile to the work: our AI-audited invoicing checks every line against what was actually completed and signed off, so a variation that was never approved never reaches your account.
Response SLAs: how fast we attend and rectify
A maintenance contract is not just renewals; it is also the day a tap fails or a door will not lock. A response SLA sets, by priority, how fast the contractor attends and how fast they rectify. An urgent fault that affects safety or security is attended within hours; a routine repair within a couple of working days; planned work to programme. The point of writing it down is that priority is agreed in advance, not argued in the moment. How those response times are then measured and reported is a separate discipline, covered in quality assurance and SLA reporting.
| Term | What it does | What to check |
|---|---|---|
| Retention | Holds back a % as security | The %, the cap, the release triggers |
| Progress claims | You pay for work done, in stages | Claim and payment timetable |
| Provisional sum | Allowance for unclear scope | That it is reconciled to real cost |
| Variation | A priced, approved change | Approval is in writing, before work |
| Response SLA | Attend / rectify times by priority | The priority bands and the clock |
| Defects period | Free rectification window | Length, and what it covers |
Practical completion, snagging and the 12-month defects check
Practical completion is the point where the work is finished and usable, even if a short snag list remains. It matters because it starts the clock on two things: the first retention release, and the defects liability period. That period, usually twelve months, is the window in which the contractor returns and fixes anything that was a defect in their workmanship, at no cost to you. A snagging walk-through at handover clears the obvious items; a check near the 12-month mark catches anything that surfaced with use. This is the aftercare backbone of the job, and it sits alongside the statutory workmanship warranty and the practical detail of a defects liability period.
Behind all of it sits the question of whether the contractor can actually stand behind these terms if something big goes wrong, which is where insurance and financial backing come in; we cover what to ask for in insurance and backing in a maintenance contractor. Sound terms with a contractor who cannot honour them are just words, so the two questions belong together.
Frequently asked questions
What is a retention on a maintenance contract, and when do I get it back?
A retention is a percentage of each payment held back as security, released in stages, typically part at practical completion and the balance at the end of the defects period. Since 2017 and 2023 amendments to the Construction Contracts Act, retention money on commercial work is held on trust and protected if the contractor fails, so it is genuine security rather than a payment you might lose.
Why are payments made by progress claim instead of up front?
Because progress claims protect both sides: you pay only for work actually done and certified, and the contractor is paid as the job progresses rather than waiting until the end. It is the default payment regime under the Construction Contracts Act 2002, and on a portfolio the claims are usually tied to units completed and signed off, so your money always follows real progress.
What is the difference between a provisional sum and a prime-cost sum?
A provisional sum is an allowance for work whose full extent is not yet known, such as making good behind an old kitchen, while a prime-cost sum is an allowance for a specific item chosen later, such as an appliance. Both are labelled allowances that get reconciled to the real cost when the work is done, with the difference credited or charged rather than hidden.
How are variations meant to be handled so the final account has no surprises?
Variations should be priced against the contract rates and approved in writing before the work is carried out, not discovered on the invoice afterward. That way any extra scope is a decision you make with the cost in front of you. An invoice audited against completed, signed-off work is the backstop that stops an unapproved variation ever reaching your account.
What does a response SLA actually commit the contractor to?
A response SLA sets, by priority band, how quickly the contractor attends a fault and how quickly they rectify it. An urgent safety or security fault is attended within hours, a routine repair within a couple of working days, and planned work runs to programme. The value is that priority is agreed in advance and then measured and reported, rather than argued case by case when something breaks.
What happens during the 12-month defects liability period?
The defects liability period, usually twelve months from practical completion, is the window in which the contractor returns and fixes any defect in their own workmanship at no cost to you. A snagging walk-through at handover clears the obvious items, and a check near the 12-month mark catches anything that appeared with use. It sits alongside the statutory workmanship warranty, which continues beyond that window.
Good commercial terms are not red tape. They are how a maintenance relationship stays fair when the work is invisible and the programme is long. If you are putting a renewal or maintenance package to the market, send us the scope and we will set the terms out plainly, so you can compare like with like rather than guessing what a lump sum really includes.