Getting to Know the Payment Claim Procedure
The key thing that you need to do to enforce your right to Security of Payment is the Payment Claim procedure. It is your ticket to get paid. If you don’t issue a payment claim or miss one detail on it, it could be difficult to get the money you deserve.
Since issuing a payment claim sets everything you need to get paid on time, everything would be just fine as long as you follow through the procedure. Else, you can always run to the authorities if they don’t comply. The law protects your right to get paid and it will work for you in order to help you get your money back through various means.
Usually, the payment claim procedure starts with setting a time frame, starting with the reference date. On this reference date, you must have already made a payment claim and give it to your builder. In return, they must give you a payment schedule.
Whatever time they said on the payment, make sure they follow it until you get the entire amount they must pay you. Else, do file for adjudication to resolve it even further. If that doesn’t work, take it to court. There are lots of opportunities to enforce your rights, so better you better use it to get paid.
Let’s talk about each step deeper.
Agreeing on a Reference Date
Set your reference date even before signing the construction contract. Negotiate if you have to. It’s important to set the reference date and its respective time frames to the contract so that you become sure which dates you can set a payment claim.
This will also make you and your builder come up with a convenient time frame, which will make your transactions smoother in the long run. So you better take into consideration when the builder can have the money to pay you.
Else, if you don’t specify a date in your contract, your builder will be obligated to pay you at the end of the month as the law says. And that could become inconvenient for both parties.
Issuing the Payment Claim
When the reference date is coming up, you better start to prepare the payment claim. The payment claim is a document that you need to present to your builder every progress payment. This document includes the work you have done so far, and the amount you have to receive for doing the work. Don’t forget the supporting documents too.
Remember to be specific about the work you did. Make sure that everything is well organized and the document complies with the Security of Payment Act. It is a way to be transparent with your builder, so do things correctly before giving it to them.
Waiting for a Payment Schedule
After issuing your builder a payment claim, they should reply you with a payment schedule. This is also a document, which includes the respective time frame when they will pay you with respect to your payment claim.
Expect a reply from your builder within 10 days after issuing the claim. But, if they don’t agree to the amount they must pay in your payment claim, they should still reply why do they disagree on it.
They should also state if they plan to pay you lower, retain some of the claimed amounts, or not pay you at all. Else, these disagreements or their lack of reply should be resolved through adjudication.
Following Respective Time Frames
After receiving the payment schedule, things should carry on until it is time for payment. If they pay you on time, then carry on until you finish your work and get the full payment for it.
This would be the ideal situation if things ran smoothly. The job gets done, you get paid, and you have a good working relationship with your builder. You even get to realize the Security of Payment.
But of course, that could not always happen. Late payments are a persistent problem in Australia’s construction industry and disputes could unexpectedly arise. So if they aren’t following the schedule or the builder has a problem with you, then keep yourself prepared to file for adjudication.
File for Adjudication, if problems arise
If things didn’t work out as you expected, you can always file an application for adjudication. Adjudication is a legal process not done in the courts, but it would need a government-appointed adjudicator to step in-between to resolve the problem.
Of course, the other party must be willing to undergo this process. This is a faster way of resolving any payment dispute, and you get to enforce your right to Security of Payment so they must be okay with it.
Adjudicator
All it takes for an adjudicator to make a decision is to look at each party’s supporting documents, the construction site, and both parties’ viewpoints on the situation. After 10 days, he or she would have to decide on the adjudicated amount so that you get paid as decided.
The whole procedure of making a payment claim could involve lots of negotiating and paperwork. If you need legal assistance from a Security of Payments lawyer at any part of the payment claim procedure, visit Contracts Specialist.
