Make Valid and Effective Claim with Security of Payment ACT NSW

Regardless of whether you are hiring a contractor to help fit out your new business office or install a new marble in your home, it is essential to be cautious about the legislative provisions that regulate how and when you pay those workers. The Building and Construction Industry Security of Payment Act 1999 is state based legislation that manages the payments for work delivered in the building and construction industry.

If you are undertaking a small or large scale building venture, expert construction lawyers can assist you better understand your rights and obligations when hiring contractors.

In NSW, the industry is directed by the Building and Construction Industry Security of Payment Act 1999 NSW. The Security of Payment ACT NSW sets out the rules and strategies that professionals such as principals, head contractors, subcontractors and suppliers must follow when making payment, claiming payment or withholding payment.

The ACT protects the rights of construction workers to receive progress payments for goods or services delivered and ensures that workers under a contract are entitled:

To receive and to recover, progress payments in relation to the carrying out of that work; and

The supplying of those goods and services.

Entitlement to Payment

Under the Act, contractors are entitled to get progress payments under any contract. This incorporates verbal, written contracts and missing contracts where the contract may stipulate that the contractor is not entitled to claim progress payments. These incorporate independent contractor agreements which sets out the rights and obligations of each party.

Progress payments are determined on the estimation of work or supplies that have been carried out or delivered and the terms of the contract. Where there is an argument about the amount of a progress payment owed, contractors may choose to engage an arbitrator to help decide the dispute. Additionally, unless otherwise stated within the contract, any claim for progress payments must be made once every month.

Payment Claims

Where there is a progress payment owing for construction work and a claim has been made by the owed party, the Act has particular time limits for payment to be made:

Payment by principal to head contractor: 15 days after claim is made.

Payment by head contractor to subcontractor (non-residential): 30 days after claim is made.

Payment by head contractor to subcontractor (residential): 10 days after claim is made.

If an individual does not intend to pay the total amount claimed, they may give a payment schedule within 10 days of the claim being made. A payment schedule is a notice in writing that must be served to the claimant to inform then the debtor does not mean to pay the amount claimed. The payment schedule must identify the payment amount being claimed and state reasons as to why an individual proposes to pay less than the amount claimed.

Despite whether you are in need of assistance with making, or contesting a claim under Security of Payment ACT NSW, expert lawyers can provide tailored advice and representation to clients - no matter the complexity of the matter at hand.

Coleman Greig Lawyers are Western Sydney’s leading law firm. We offer commercial & private legal support in Norwest, Baulkham Hills, Castle Hill & Parramatta.