Final Valuation

Section 1

Purpose

Note on JCT editions: JCT has published the 2024 Edition. This guidance cites JCT SBC/Q 2016 clause references; the commercial and payment mechanisms are substantively unchanged in the 2024 edition, but specific clause references should be verified against the contract edition in use on any given project.

The Final Valuation is the QS's definitive financial statement of the total sum due to the contractor at the end of the contract, incorporating all agreed variations, all agreed claims, all agreed fluctuations (if applicable), and the release of all retention monies. It is the penultimate step before the Final Account Agreement and the Final Certificate: it represents the QS's professional certification of the contractor's total entitlement under the contract.

The Final Valuation is distinct from the Final Account Forecast (which is an estimate) and the Final Account Agreement (which requires the contractor's acceptance). It is the QS's own independently prepared statement — informed by the Variation Account and Claims Settlement but prepared as a formal valuation document in the same way as an interim certificate, with the same professional responsibilities for accuracy and completeness.

Under JCT SBC/Q 2016 Clause 4.12, the QS must prepare the Final Valuation within 3 months of receiving the contractor's Final Account submission (or such other period as specified). Delay in preparing the Final Valuation can hold up the Final Certificate and expose the client to interest liability under HGCRA.

Section 2

Key Principles

RICS Final Account Procedures (1st ed.): the Final Valuation is the QS's statement of the total sum due; it must be prepared independently of the contractor's submission and then compared to identify differences.
JCT SBC/Q 2016 Clause 4.12: the QS sends a copy of the Final Valuation to the contractor within 3 months of receiving the contractor's Final Account; the contractor has 3 months to raise any dispute.
HGCRA 1996 (as amended): the payment due date, final date for payment, and interest provisions apply to the Final Certificate in the same way as interim certificates — late payment carries statutory interest.
RICS Retention (GN 90/2012): both moieties of retention must be included in the Final Valuation as a release; the QS must confirm that the CMGD has been issued before including the second moiety release.
JCT SBC/Q 2016 Clause 4.15: the Final Certificate is conclusive evidence of the sum due unless challenged within 28 days — the Final Valuation feeds directly into the Final Certificate.
NEC4 Clause 50: the Project Manager assesses the amount due at each assessment date; the final assessment follows the same rules as interim assessments with all compensation events and disallowed costs included.

Section 3

Practical Application

Step 1

Obtain the final agreed Variation Account and Claims Settlement Statement; confirm that all items are agreed or formally disputed; do not include disputed items in the Final Valuation without flagging them separately.

Step 2

Prepare the Final Valuation schedule: Original Contract Sum; plus/minus all agreed variations; plus agreed loss and expense; plus/minus agreed fluctuations (if applicable); less/plus retention releases; equals Final Sum Due.

Step 3

Confirm the retention position: verify that the first moiety was released at PC (and the payment records confirm it); confirm that the CMGD has been issued; include the second moiety release in the Final Valuation.

Step 4

Check that all interim payments are correctly accounted for in the Final Valuation — the sum due under the Final Certificate is the net amount after deducting all previously certified and paid amounts.

Step 5

Where fluctuations apply (JCT Supplemental Provisions or Option B/C), apply the appropriate formula or traditional fluctuation recovery and include as a separate schedule.

Step 6

Issue the Final Valuation to the contractor with a covering letter and comply with HGCRA payment notice requirements — confirm the sum due, the basis of assessment, and the final date for payment.

Step 7

If the contractor disputes the Final Valuation, log the dispute formally; the contractor has 3 months to challenge under JCT Clause 4.12; unresolved disputes must be referred before the Final Certificate is issued.

Section 4

Common Mistakes to Avoid

Including items in the Final Valuation as 'agreed' when they are only assessed — the Final Valuation must accurately reflect the agreed position, with disputed items shown separately.
Failing to check that the first moiety of retention was actually paid — if it was not, it must appear in the Final Valuation as a credit balance adjustment.
Issuing the Final Valuation without a HGCRA-compliant payment notice — the Final Valuation is a payment notice; failure to comply with HGCRA creates default sum risks.
Including the contractor's unsubstantiated claims without independent assessment — every item in the Final Valuation must be independently verified by the QS.
Omitting fluctuations entirely on a fixed-price contract without checking the contract for any fluctuation provisions — some contracts include named product fluctuation clauses even with 'firm price' tenderers.

Section 5

APC Competency & Quick Reference

Contract Practice Level 3 — Final Valuation preparation, retention, Final Certificate, HGCRA compliance
Quantity Surveying & Construction Level 3 — valuation methodology, contractor's Final Account checking

What is the difference between the Final Valuation, the Final Account Agreement, and the Final Certificate?

The Final Valuation is the QS's independently prepared statement of the total sum due, incorporating all agreed items. The Final Account Agreement is the document signed (or agreed) by both parties confirming the settled sum. The Final Certificate (issued by the CA under JCT) is the conclusive contractual document certifying the Final Adjusted Contract Sum — it becomes conclusive unless challenged within 28 days.

What retention amounts must the QS include in the Final Valuation?

The Final Valuation must account for all retention. If the first moiety was not already released and confirmed as paid, it appears as a balance due. The second moiety retention release is triggered by the CMGD — the QS must confirm the CMGD has been issued before including this release in the Final Valuation. RICS Retention (GN 90/2012) confirms retention funds should be held in trust.

What are the HGCRA payment notice requirements for the Final Valuation?

Under HGCRA 1996 (as amended), the QS must issue a Payment Notice (or the contractor's application serves as the notified sum) specifying the sum due and the basis of calculation. The Employer must issue a Pay Less Notice at least 5 days before the Final Date for Payment if they wish to withhold any amount. Failure to issue a Pay Less Notice prevents any deduction from the notified sum.

Section 6

Completion & Final Account Checklist

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Task

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Final Variation Account and Claims Settlement confirmed as basis for Final Valuation

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Final Valuation schedule prepared: contract sum → variations → L&E → fluctuations → retention releases → net sum due

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Retention position verified: first moiety paid at PC; CMGD issued for second moiety

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All interim payments deducted to give net Final Certificate sum

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Fluctuations calculation prepared and included where applicable

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Final Valuation issued to contractor with HGCRA-compliant payment notice

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Contractor's response/dispute logged within JCT 3-month dispute window

Section 7

CPD Learning Outcomes

Prepare a Final Valuation schedule incorporating all agreed variations, claims, retention releases, and fluctuations, in compliance with JCT SBC/Q 2016 Clause 4.12 and RICS Final Account Procedures.
Issue the Final Valuation as a HGCRA-compliant payment notice, specifying the sum due, the basis of assessment, and the final date for payment.
Advise the client on the contractual and financial significance of the Final Certificate and the 28-day challenge window under JCT SBC/Q 2016 Clause 4.15.

Section 8