Protecting your right to security of payment in construction

Protecting your right to security of payment in construction

Across the world, various states and territories have their own versions of construction laws. One common construction law that each state has is regarding non-payment and late payment for construction work.

This law is called the Security of Payment Act. This law protects contractors for non-payment and late-payment, and provides ways on how to claim your money in case it happens.

Currently, it serves as the government’s claws against this common problem in the industry. But these claws are being sharpened. A lot of Australian territories such as Queensland and West Australia are rethinking their equivalent laws on security of payment. They are current thinking of amendments to these laws, especially on how they can enforce it better.

Yet, these changes are still in the works. It may take a while to see these changes implemented. So here’s how you can currently enforce your rights to Security of Payment.

Right with fixed progress payment time frames

You have all the right to get paid in a fixed time frame, depending on your contract. Your are also have the right to get paid in a progress payment scheme, where you get paid after completing each of the tasks assigned to you.

If they miss one progress payment date, your builder might get in trouble. Each party should have agreed to a reference date prior to finalizing the contract and must stick to it. But that does not happen all the time. If there is no date specified, they must pay you whole at the end of the month.

But things might change after the proposed amendments have been proclaimed. One change is a statutory date for your progress payments. Which means, both parties wouldn’t have to agree to a reference date, but it is already mandate to be the end of the month.

But, whichever date is agreed on, make sure to remember the date and remind your builder that you have to get paid on that time. Always keep your payment claims ready when this time comes.

Right to suspend work, if necessary

When your payment does not come on time, you have the right to suspend your work. But of course, do not just stop work immediately. You still have to write a letter to your builder to inform them that you would stop work until you get paid.

The Security of Payment Act allows this, don’t worry. But remember, when you do get paid, you must resume your work three days after you get paid. You may do this when deemed necessary, or you can just straight up file an adjudication application or take it to court.

To be sure, just ask your construction lawyer on what legal processes that you should do first. They would know what is best for your situation.

Right to seek an Adjudicator

When having disagreements with how much you are claiming or any other reason that your builder is not paying you, adjudication can help you in resolving your problem faster before it escalates into a larger payment issue.

This will involved both parties agreeing to seek the help of a government-appointed adjudicator to help look into your problem. He will be obligated to hear each side’s point of view, their supporting documents, and what is happening on the actual site. He also has to decide on an adjudicated amount after seeing these things after 10 days, and each party should oblige.

But in case the builder still cannot pay you even the adjudicated amount, then you have to take your case to the respective tribunals or courts.

Right to put interest

When the payment dispute is resolved through a court or tribunal, then it may become a builder’s debt to you. And as permitted by the law, you can put a little percent of interest especially if the builder promises you to pay you by parts.

But if they can’t really pay you, then the respective court might go after their possessions as payment and use its value to correspond to their debt. This is done to make sure that you get paid at all costs. You deserve to receive payment for the construction work that you have worked hard for, so the law will also work hard help you get paid.

Harder punishment for nonpayment and late payment

Currently, you would also just be issued 200 penalty units for violating this law. But with the proposed amendments, you will get a thousand penalty units, or even get imprisoned if the offence is greater. Thus making it a stricter enforcement of this law.

These amendments would also aim to protect more of the subcontractors, so that they can enjoy more rights in this law. For example, a subbie can now get paid after 20 days instead of 30 days by their head contractor. This hopefully helps builders be mindful of paying their contractors and subcontractors, if the amendments pushes through.

For any legal concerns on Security of Payment, book a consultation with Contract Specialist. With their 10+ experience in construction law, you are sure that you will fully understand your right on these construction laws. They can also guide you any legal process you need assistance with, like in adjudication and in court trials. Start enforcing your rights by seeking expert legal advice.

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