Project Bank Accounts

Construction Project Bank Accounts are third-party managed payment accounts used to receive and distribute construction project funds in a structured and transparent way.

Instead of one party holding all project money and paying others from their own account, funds are paid into an independent Project Bank Account. Payments are then made to contractors, subcontractors and consultants in line with agreed rules and certifications.

Project Bank Accounts are designed to support fair payment, reduce insolvency risk and ensure that project funds are used only for the project itself.

Construction Project Bank Accounts are suitable for developers, private clients and public sector bodies commissioning construction works.

They are also suitable for main contractors and supply chains that want greater certainty around payment timing and protection from upstream insolvency.

Public sector clients often use Project Bank Accounts to support prompt payment and transparency. Private clients and developers use them where projects are complex, high-value or reputationally sensitive.

Project Bank Accounts are typically used from the start of a construction project, once the contract structure and payment mechanism have been agreed.

They are used throughout the life of the project to manage interim payments, variations and final accounts. Funds are paid into the account and then distributed as work is certified.

They are particularly useful on projects with multiple subcontractors, long programmes or where funders or public accountability require strong payment controls.

In a traditional arrangement, the employer pays the main contractor, who then pays subcontractors from their own account. This can expose the supply chain to delay or insolvency risk.

A Construction Project Bank Account separates project funds from the contractor’s own finances. Payments are made directly to the intended recipients once the agreed conditions are met.

This improves transparency, reduces reliance on trust and can significantly reduce payment disputes.

Construction projects often suffer from late payment, withheld funds and exposure to insolvency within the supply chain.

Developers and clients may struggle to demonstrate that funds are being used appropriately. Contractors and subcontractors may face uncertainty over when, or if, they will be paid.

Project Bank Accounts address these challenges by ring-fencing project funds and paying them out only in line with agreed certification and approval processes.

The primary benefit of a Construction Project Bank Account is fair, transparent and controlled payment across the project supply chain.

Funds are protected, payments are predictable and all parties can see how money flows through the project.

Benefits for clients and employers

For developers, private clients and public sector bodies, Project Bank Accounts provide confidence that project funds are used only for the project.

They support good governance, improve oversight and can reduce the risk of disputes, delays or reputational issues.

Benefits for contractors and subcontractors

For contractors and subcontractors, Project Bank Accounts improve payment certainty.

Funds are already in place and paid out promptly once work is certified, reducing exposure to upstream cashflow problems or insolvency.

Benefits for advisors and stakeholders

For project managers, contract administrators, funders and auditors, Project Bank Accounts provide a clear and auditable payment framework.

They support compliance with payment policies and provide transparency that is difficult to achieve under traditional payment models.

Construction Project Bank Accounts can be structured in different ways depending on the project and procurement route.

Some accounts are used to pay the main contractor and named subcontractors directly. Others operate with multiple tiers of beneficiaries.

Accounts may also be combined with retention or security arrangements, provided payment rules are clearly defined.

Yes. Construction Project Bank Accounts are commonly tailored to reflect the contract structure and client requirements.

Approval matrices, certification steps and payment timings can be aligned with the building contract. Public sector clients may require additional reporting, while private clients may prioritise flexibility.

Project Bank Accounts can also be combined with escrow arrangements, for example where some funds are held as security while others are paid out as work progresses.

In practice, all TPMA's work by separating payment from approvals rules.

These approvals may be given in advance (say, where a transaction is taking place, or a dispute has been settled, and a known amount of money needs to be paid to identified parties), or on an ad-hoc basis (where a procurement agent, house manager, interior designer, lawyer or trusted advisor is given permission to spend the paying party's funds.

A specific bank account is opened for each payment scenario, and the funds are held there until (a) a payment request is made; and (b) the approvals conditions are satisfied. Once those two conditions have been met, we carry out our compliance checks and then make the payment(s).

If those conditions are not met, the funds remain held in accordance with the account documents.

We follow the agreed approvals matrix and we do not exercise any discretion beyond ensuring that the approvals conditions have been satisfied.

Only parties authorised under the account documents can make a payment request. This is agreed at the outset and documented clearly, together with any specific approvals that might be needed, say, for payments in excess of a specific threshold, or for payments to certain beneficiaries.

Instructions are usually tied to specific documents, such as a purchase order, pro-forma invoice, invoice, payment certificate, settlement agreement, sale and purchase agreement, court order or other legal document.

We check that the instruction matches the agreed conditions before acting.

This approach ensures that payments are controlled, predictable and not dependent on informal requests or unilateral decisions by one party.

1. Funds are paid into the TPMA.
2. Payment requests are made and approvals requirements are checked.
3. Payments are made.
4. The balance remains in the account.

This simple structure is what makes TPMA's reliable across many different use cases.

A Third-Party Managed Account is a three-way scenario between (a) the paying/funding party; (b) anyone who is entitled to make payment requests or authorise them; and (c) us, as the paying agent.

We do not provide pooled TPMA's for law firms, estate agents or other professional advisors - instead, a new account is opened for each individual client or matter - this ensures that every client's funds are in their own specific account and that we are able to carry out our required screening, monitoring and ongoing compliance requirements in respect of every individual matter.

When a professional advisor wishes to open a TPMA for their client to deposit funds with us, we onboard the paying party (the client), carry out our mandatory compliance checks, agree the account mechanics (pricing, who can make payment requests, and who can authorise them) and then open the account and provide the unique account details.

Timing depends on the complexity of the parties and the arrangement.

For straightforward structures, account opening can usually be completed within a short period (even on the same day) once information is provided.

Delays are usually caused by missing onboarding information rather than the account opening process itself.

Standard onboarding checks are required.

This includes confirming identity, ownership and control of any entities involved, and the source of funds.

We also need a clear description of the purpose of the account and those parties who will be authorised to make payment requests or authorise payment releases.

In order to open an escrow account, what is typically required is:

• Details of the parties
• Identification information
• Ownership and control details
• Source of funds information
• Summary of the underlying transactions or obligations, and a copy of the contract/agreements
• Agreed payment request and authorisation conditions

If we require any other information, we'll let you know when we give you your quote.

Accounts are funded by the party providing the funds under the agreement. Each arrangement has a uniquely addressable bank account with its own account number and sort code combination, and we are able to accept BACS/CHAPS/Faster Payments and international SWIFT payments.

Funds may be paid in a single amount or in stages, depending on the arrangement.

Once paid in, funds are ring-fenced for the agreed purpose.

We are not able to accept cryptocurrencies, cheques or cash.

Funds are released only when the agreed conditions are met.

The TPMA account opening form specifies what evidence is required and who may make payment requests or authorise releases.

When conditions are satisfied, funds are released promptly and in accordance with the agreement.

If instructions are disputed or unclear, we will not release the funds without the paying party's consent.

Instead, the funds remain held safely in the escrow account while we seek the paying party's authorisation to make the payment.

This approach protects all parties. It ensures that money is not released prematurely and that funds remain available once the position is resolved.

We hold the balance of a TPMA on trust for the paying party. What that means is that if the paying party becomes insolvent, their administrators are likely to make a claim on the contents of the TPMA as constituting funds that belong to that paying party.

What happens if DOS & Co. becomes insolvent?

All TPMA funds are segregated (kept separate from our own funds), safeguarded (protected by law from our own creditors) and kept liquid and unencumbered at the Bank of England. In the event of our insolvency, we have set aside regulatory capital that will be used by our administrators to 'unwind' our affairs - this will usually involve returning the funds directly to the paying party.

Funds paid into an escrow account are held separately from the money of any other parties and separately from our own funds. They are not mixed with operational accounts.

All of our TPMA funds are held liquid and unencumbered at the Bank of England. This means that there is no counterparty risk (the bank does not lend out funds, so a 'run on the bank' is not possible).

The TPMA account is set up specifically for the purposes agreed in the TPMA Account Opening agreement. Funds can only be used in line with that agreement and cannot be applied for any other purpose.

We are regulated by the Financial Conduct Authority for the provision of payment services. This means we are required to meet regulatory standards around governance, systems, controls and the handling of client funds.

Where TPMA arrangements involve regulated payment activity, those activities are carried out within that regulatory framework.

In practical terms, this combination of regulation and contract provides structure and oversight, while still allowing arrangements to be tailored to the needs of a specific matter or project.

Third-Party Managed Payments are designed to follow agreed payment rules, not to make judgments or resolve disputes.

We do not decide whether a payment should be made beyond checking that the agreed approval conditions have been satisfied.

We do not interpret contracts, assess performance, verify the quality of goods or services, or exercise discretion over how funds are spent.

If approval conditions are not met, or if instructions fall outside the agreed rules, payments are not made and the funds remain held in accordance with the account documents.

Pricing for Third-Party Managed Payments is usually based on the complexity of the arrangement and the level of activity on the account.

This typically covers account set-up, safeguarding of funds, ongoing operation of the account, processing of payment requests, compliance checks and reporting. Where payment volumes are higher or approval structures are more complex, pricing reflects the additional administration involved.

All pricing is agreed in advance, so parties have clarity on costs before funds are paid into the account.

If a payment request does not meet the agreed approval conditions, the payment is not made. The funds remain held in the account in accordance with the account documents.

If there is uncertainty, dispute or missing information, we pause processing and seek clarification from the paying party. We do not release funds unless the agreed conditions are satisfied.

This approach ensures that errors, informal requests or unilateral instructions do not result in unintended payments.

dospay provides a specialist, escrow-first approach to managing payments neutrally and transparently. We are structured to hold and move funds strictly in accordance with agreed rules, without exercising discretion or commercial judgment.

Our digital platform provides visibility, auditability and control over payment flows, while keeping funds segregated and protected. This makes it easier for parties and advisors to manage complex payment arrangements with confidence.

Using dospay allows parties to separate payment mechanics from decision-making, reduce operational risk and avoid the need for one party or advisor to hold and control funds directly.