Security Of Payment Act - COVID19
What The Security of Payment Act Means For You During The COVID19 Pandemic
The coronavirus has affected people’s lives around the entire globe, no country has been left untouched.
Australia is no exception.
The building and construction industry in Australia has been affected by COVID19 in many ways, some of those ways affecting the livelihoods of many subcontractors in quite serious ways.
As usual, but especially during this COVID19 pandemic, the security of payment act has been the difference between subcontractors getting paid for all of their work and only getting paid for some of their work or even worse not getting paid at all.
The Security Of Payment Act has even been improved over the past year or so to make it an even more effective tool for subcontractors to use to resolve payment disputes.
In New South Wales (NSW), the Building & Construction Industry Security Of Payment Act 1999 (NSW) legislation has been great improved by the removal of “reference dates”. What this means is that the argument that you don’t have a right to claim because a contract restricts the times that you can claim for your work no longer has any basis. Section 13 of the Building & Construction Industry Security Of Payment Act 1999 (NSW) now deals with when you can claim. Simply speaking, the Building & Construction Industry Security Of Payment Act 1999 (NSW) now says that you can claim once per month on the last day of the month during the works and up to 12 months after you have finished the works, and that if a contract specifies an earlier day of the month than you can use that day of the month instead of the last day of the month if you choose to, but you don’t have to. And even if a contract is terminated then you still have a right to make one last claim for payment after termination of the contract. This is all very important for subcontractors in these uncertain times of the COVID19 pandemic – the Building & Construction Industry Security Of Payment Act 1999 (NSW) gives you an even better pathway to payment than it ever has before decreasing stress surrounding payment disputes when there is the added uncertainty the coronavirus brings to our lives and businesses.
“The Security Of Payment Act is still
the best pathway to payment
for subcontractors by a country mile”
The Security Of Payment Act legislations for other states is still providing the same pathway to payment for subcontractors that it always has too.
Have no doubt that these state legislations, listed here below, provide the preferred pathway to payment for subcontractors in the building and construction industry, they are the best option bar none for subcontractors seeking payment for building and construction works and related goods and services.
BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 1999 (NSW)
BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 2002 (VIC)
BUILDING INDUSTRY FAIRNESS (SECURITY OF PAYMENT) ACT 2017 (QLD)
BUILDING AND CONSTRUCTION INDUSTRY (SECURITY OF PAYMENT) ACT 2009 (A.C.T.)
BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 2009 (SA)
BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 2009 (TAS)
What does all this mean for you during this time of the COVID19 pandemic?
The answer is simple, you can rely on the security of payment act legislation for your state as the best pathway to payment for your building and construction work despite all of the upheaval of this pandemic
In fact the security of payment act process is perfect where social distancing and lockdown restrictions are in place because no meetings are required and no appearances at hearings, tribunals, etc are required.
The security of payment act process, as usual, is a simple 2-3 step process conducted remotely.
The first step is the preparation and valid service of a valid payment claim. To start this process click here
The second step, only if required, that is, if the first step is ignored, is the preparation and valid service of a valid 2nd Notice (not required at all in Queensland).
The third step is the preparation, lodgement and valid service of a valid adjudication application, if you are up to that stage click here
As set out earlier, the security of payment act is the preferred pathway to payment because it is the fasted, cheapest, most successful way to obtain a judgement against a debtor, and until you have a judgement against are debtor they can ignore your pleas for payment indefinitely. But once you have a judgement, you call the shots.
Or, call us between the hours of 8AM – 8PM on
(1300 224 772)
Thank you for taking the time to read this information, we hope it proves useful, and please stay safe during this pandemic yourself and do everything you can to keep others safe from the coronavirus too!
Security Of Payment Act NSW Has Changed
As of 21 October 2019, building and construction contracts entered into will be subject to the most recent amendments to the Building & Construction Industry Security Of Payment Act 1999.
The significance of the changes for claimants is worth noting carefully.
The changes to the Building & Construction Industry Security Of Payment Act 1999 legislation have simplified reference dates. Reference dates are the time that a claimant is allowed to make a claim under the Security of Payment Act NSW. A claimant is now assured of at least one reference date per month and it is than last day of the month unless a particular date is stated in a contract.
No longer can a Claimant be deprived of making a claim under the Building & Construction Industry Security Of Payment Act 1999 legislation when a contract has been terminated.
However it is of the utmost importance to not that there is only one opportunity to do so after termination so it is crucial to ensure that the claim is well prepared, valid, and properly served. For help with this we direct you to our Security Of Payment Act NSW Specialists via our Online Claim Form.
The next most important change for Claimants is the reduction of the time allowed for Respondents to pay a payment claim served under the Building & Construction Industry Security Of Payment Act 1999 legislation. If the contract between the parties makes no express provision, or overly long payment terms, than the maximum time now allowed for payment under the Security Of Payment act NSW is 20 business days from the date that the payment claim was properly served on the respondent.
There has also been changes to how head contractors must manage monies held in trust under the Building & Construction Industry Security Of Payment Act 1999 legislation that provide further protection for claimants and add increased penalties for directors of head cantor companies who fail to meet their obligations under the Security Of Payment Act NSW.
Changes have also been made to allow claimants to withdraw adjudication applications when it is in their best. interests to do so.
Building & Construction Contracts - Liquidated Damages
Liquidated damages are the often the biggest issue to catch sub-contractors by surprise.
Sub-contractors will invariably sign a building & construction contract that has a “time for completion” clause clearly identified in the contract, and a “liquidated damages” clause also clearly identified in the contract.
A person referred to in section 8 (1) who is or who claims to be entitled to a progress payment (the
“claimant” ) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment.
On and from each reference date under a construction contract, a person: who has undertaken to carry out construction work under the contract, or who has undertaken to supply related goods and services under the contract, is entitled to a progress payment.
Under the Security Of Payments Act a “construction contract” means a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party.
Security Of Payments Act NSW 2013 Amendments
Security Of Payments Act NSW changes passed through the NSW Parliament in October 2013.
The three amendments are:
the introduction of maximum payment terms for progress payments, ie: 15 business days and 30 business days;
the requirement that when payment claims are made by a contractor they must include a supporting statement that declares that all subcontractors have been paid what is due and payable to them at the time of making the claim; and
that an invoice will no longer need to have the endorsement that it is being made under the Act to be a valid payment claim.