If the construction contract has been terminated, a payment claim can be made from the date of termination. A payment claim must identify the goods or services the claim relates to, the claimed amount, and clearly state it is a payment claim made under the Security of Payment laws. A claimant can only make a claim within the period determined in the contract or 12 months after the work was carried out (whichever is later). A head contractor claimant must fill out and attach a supporting statement form to their claim. Replying to a payment claim: payment schedules A party who has been served a payment claim (“the respondent”), may reply by providing a payment schedule to the claimant. There are strict timeframes for a respondent to provide a payment schedule to a claimant. These are: • within the time outlined in the construction contract, or • within 10 business days after the payment claim is served (whichever is earlier). If a respondent does not provide a payment schedule to the claimant within the timeframe required, they are liable to pay the amount requested by the claimant in the payment claim.
Due date for payment A person 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. There are specific maximum deadlines for payment depending on the nature of the contract. If the construction contract under which the payment claim is made is not an owner occupier construction contract as defined by the Act, the following will apply: Where a head contractor makes a payment claim to a principal, the payment claim becomes due and payable by the principal: • 15 business days after the payment claim is served on the principal, or • an earlier date if the construction contract between the principal and head contractor specifies this.
A progress payment to be made to a subcontractor becomes due and payable:
• 20 business days after the payment claim is served on the head contractor, or • an earlier date if the construction contract between the parties specifies this. Where a party to an owner occupier construction contract makes a payment claim, the claim becomes due and payable: • in accordance with the terms of the contract, or • if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is served on the person liable to make the payment. Procedure for recovering progress payments A claimant can serve one payment claim in any month under each contract (can be on last day of one month and first day of next month) or on or from an earlier date if the contract provides this.
A payment schedule must identify:
• the payment claim it is for
• the amount of payment (if any) that will be paid (the “scheduled amount”) • if the scheduled amount is less than the claimed amount, why the scheduled amount is less • if it is less because the respondent is withholding payment for any reason, the respondent’s reasons for withholding payment.
Fair Trading Security of Payment Guide | February 2021
Page 2 of 4
Made with FlippingBook Publishing Software