Liquidated damages — when and how to ask for them
Liquidated damages are a contractual mechanism that holds your builder to account on the project timeline. They're available on larger projects if your builder agrees.
Liquidated damages — usually shortened to LDs — are a clause in the Home Improvement Contract (HIC) that gives you a defined remedy if your builder runs significantly late. They're a way of holding your builder to account on the timeline without anyone having to negotiate at the end of a delay.
What they are
If LDs are included in your HIC, they specify a daily or weekly amount the builder pays if the project runs past the agreed completion date by more than an agreed buffer. The amount, the buffer, and the cap are all set in the contract.
LDs hold your builder accountable on programme. They don't create a Beams obligation — Beams is not a party to the HIC, and the Liquidated Damages (LD) payment flows from the builder to you under the contract.
When they apply
Our standard HIC template includes the option of LDs on projects above £75,000 in construction value. They're not on every project — both you and your builder need to agree to include them in the contract.
Most builders will accept LDs on larger projects where they expect to deliver to programme. Some will price the project a little higher to reflect the risk; that's a fair trade-off and worth weighing up.
How to ask for them
Tell your planner at the contract stage that you'd like LDs included. They'll talk to your builder. If the builder agrees, the LD clause is included in your HIC; if they don't, you can either proceed without LDs or talk through the alternatives.
If your project is below the £75k threshold, LDs are still available on a case-by-case basis if you and your builder both want them. Talk to your planner.
What this means for you
LDs are useful on larger projects with firm completion dates, and particularly useful if a delayed completion would cost you real money — for example, if you'd be paying for temporary accommodation, storage, or commercial costs that scale with each week the build runs over. They're not a substitute for a good builder — a builder you trust to deliver to programme is worth more than an LD clause against a builder you don't. But they're a useful contractual reinforcement when the dates really matter to you.
Related articles
- The contracts behind your project
- What to do if your project is significantly delayed
- Signing your HIC and what to expect next