What does the Building and Constuction Industry Payments Act 2004 mean to you?
17th November, 2007
Recently I was asked to advise a client on recovery of money from a builder and was surprised my client was not aware of the Building and Construction Industry Payments Act 2004 (“the Act”). I have set out a summary of some of the salient features of the legislation.
How does the Act work?
For the Act to apply, your progress claim/invoice must state, “This is a payment claim made under the “Building and Construction Industry Payments Act 2004 (Qld)”. This is known as a Payment Claim.
Upon the builder receiving a Payment Claim, he/she must within the time required by the Contract or within 10 business days of being served, whichever is the earliest, respond to the Payment claim by serving a Payment Schedule. The purpose of the Payment Schedule is to state the amount of the payment, if any, which the Builder proposes to make and if no payment is to be made, the reasons for withholding payment.
If the builder does not provide a Payment Schedule or make a payment within the above specified timeframes, you have the following options to recover the unpaid debt:
(a) by obtaining a judgment against the builder as a debt owing in any court of competent jurisdiction; or
(b) make an adjudication application in relation to the Payment Claim.
If the builder has not provided you with a Payment Schedule, prior to making an adjudication application, you must provide notice to the builder, within 20 business days immediately following the due date for payment, of your intention to apply for an adjudication application. Your notice must state that the builder may serve a payment schedule within 5 business days of receiving the notice.
If at the expiration of the 5 business days, the builder still does not provide you with a payment schedule, you have 10 business days within which to make an adjudication application.
If the builder does provide a payment schedule, you must within 10 business days of receiving the payment schedule to make an adjudication application.
If the builder does provide a payment schedule, but fails to pay the whole or any part of the amount specified in the payment schedule, you must make an adjudication application within 20 business days after the due date for payment.
Upon receiving an adjudication application, an adjudicator has 10 business days within which to make its decision.
Advantages and disadvantages of the Act
The Act has the following advantages:
- It is a rapid adjudication process, which aims to avoid the delays commonly associated with litigation.
- The Act is not about resolving contractual disputes between the parties, but rather about payment and the movement of money.
- It reduces a builder’s ability to hold onto money when it should be paid to the subcontractor.
- It does not affect the rights of the parties under the contract.
The Act has the following disadvantages:
- Does not apply to any contracts entered into prior to 1 October 2004.
- Does not apply to residential contracts where one of the parties is a resident owner of the property which is subject to the contract.
Should you wish to discuss any matters please do not hesitate to contact Tony Scoglio of Scoglio Law on (07) 3833 2100 or tony@scogliolaw.com.au.
The information produced in this article is for information purposes only. It is not intended that you act on this advice. Should you wish to do so it is recommended that you seek further legal advice and/or financial advice.
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