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Security of Payment Guide

Introduction to Security of Payment Laws

We have prepared this Security of Payment Guide to help Developers, Contractors, Subcontractors, Suppliers and Consultants in the building industry gain a better understanding of how the security of payment regime works and when and why to seek our professional help.

These laws are unlike any other law and can be the source of significant rights as well as severe adverse consequences for most businesses in the building industry. These laws should not be taken lightly nor should the potential benefits be overlooked by small or medium businesses.

Strict Time Limits Apply! If you need advice don’t delay. Call now for a Free Case Evaluation.

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Overview

Most business owners in the building industry are aware of the Building & Construction Industry Security of Payment Act 1999 (NSW) (or interstate equivalents) but readily admit that they do not have a proper understanding of how they operate.

Security of Payment Laws create statutory rights that exist despite the terms of a Construction Contract. These rights relate to:

  • the right to recover payment of a progress claim through the Courts as an indisputable Statutory Debt where the other party fails to provide a Payment Schedule in time,
  • the prompt, cost effective and enforceable Determination of disputed progress claims by an independent Adjudicator,
  • the Maximum Time Limits for Due Dates for payment of progress claims,
  • the entitlement to Interest on overdue progress claims,
  • the obtaining of payments directly from a Principal Contractor, and
  • the Suspending of work without liability.

Importantly, all rights flow from the service of a valid Payment Claim and strict compliance with the Act is necessary in terms of both the issue of valid Payment Claims and time limits.

In most cases, the issue most relevant to determining whether a Payment Claim is valid is the evaluation of the Reference Date to which it relates.

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Why Serve Valid Payment Claims?

When you serve a valid Payment Claim you will:

  • have an indisputable statutory right to payment of the amount claimed, where the other party does not respond with a Payment Schedule within the allowed time, and
  • be entitled to have any dispute raised in a Payment Schedule determined by an independent Adjudicator within 10 business days of lodging an Adjudication Application.

Conversely, if you receive a valid Payment Claim and do not respond with a Payment Schedule within the allowed time, you will be:

  • prohibited from raising any Cross Claim or Defence in relation to any matter arising under the Construction Contract in proceedings brought against you for recovery of the amount claimed, and
  • prohibited from filing any Response to an Adjudication Application lodged in relation to the Payment Claim.

The following Enforcement Flow Sheets form part of the Guide and will give you an overview of how the Act works and why it is important to serve valid Payment Claims:

If getting paid for your hard work is important to your business why take any chances on not being able to rely on the security of payment regime when you need to.

In practice, where a Statutory Right to Payment exists, Court proceedings are rarely necessary, and in most cases a well drafted legal demand will swiftly turn a reluctant payer into a willing and anxious payer.

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Call Now to speak to an Expert Security of Payments Lawyer.

Our Security of Payment Guide is an essential tool for every business owner in the building industry.

What’s in the Guide

Our comprehensive Security of Payment Guide answers the following questions and more:

  • When does the Building & Construction Industry Security of Payment Act apply?
  • How does the security of payment regime work?
  • When can/should I apply for Adjudication of a Payment Claim?
  • What is a Statutory Right to Payment?
  • When is a Tax Invoice a Valid Payment Claim?
  • What if my Tax invoice was not a valid Payment Claim?
  • What is a Reference Date?
  • How can a Payment Claim be Served?
  • What is a Payment Schedule?
  • How does the Payment Withholding Request system work?

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Contents

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Testimonials

I commend Roberts Legal’s approach to encouraging people to get it right up front, rather than wait until there’s a problem. It’s a breath of fresh air.

“I really like Sam Roberts’ article on Security of Payments. Too many commentators focus on the dispute provisions rather than the excellent process that Sam alludes to in his article. We are delighted to see contract clauses that encourage complying Payment Claims, as opposed to the current trend for “look around the corner” avoidance tactics. I commend Roberts Legal’s approach to encouraging people to get it right up front, rather than wait until there’s a problem. It’s a breath of fresh air. We strongly encourage all businesses in the building industry to insist on using a complying process as a business-as-usual practice to protect their entitlements. To this end we have developed a unique software solution to facilitate the process.”

John Lowry, Director The Power Tool Pty Limited

Don’t get caught out or miss the opportunity to use the Security of Payment Laws when you need them most.

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Strict time limits apply! If you need advice don’t delay. Call now for a Free Case Evaluation.

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