Contractors Debts Act 1997

Contractors Debts Act 1997 facilitates the re-assignment of a debt owed by a contractor to the principal contractor.

This is especially important to subcontractors who are dealing with unreasonable clients who are doing anything and everything they can to resist payment even after judgment has been awarded against them. New South Wales is certainly the envy of all of the other states when it comes to this piece of legislation and how it works to bolster the Security Of Payments Act NSW process.

The Contractors Debts Act 1997 works hand in hand with the Building & Construction Industry Security Of Payment Act 1999 for the Security Of Payments Act NSW purposes.

The Contractors Debts Act 1997 follows on from serving a Payment Withholding Request under the Building & Construction Security Of Payments Act 1999 upon lodgement of an adjudication application. The Payment Withholding request is served on a principal contractor who then must withhold monies from the Contractor equivalent to the amount claimed the subcontractor pending the outcome of the adjudication application.

Once the adjudication application is determined, assuming the claimant is successful, and the claimant proceeds to enter judgment in the appropriate court, the Contractors Debts Act 1997 then takes over from the Security of Payments Act NSW and reassigns the debt to the principal contractor who is holding the money.

The principal is then ordered by the court to pay the money to the claimant. To read more in detail, click here: Contractors Debts Act 1997

To ensure you take full advantage of the Contractors Debts Act 1997 from the very start of the Security Of Payments Act NSW process call RECOUP Contractor Debt Recovery for expert assistance.

How To Add Interest To Your Invoices

Add Interest to Your Invoices for your Payment Claims.

Call RECOUP to learn how this can be done legally.

RECOUP Contractor Debt Recovery Are Your Best Option For Preparing & Running Security Of Payments Act Payment Claims & Adjudication Applications that include interest on late and overdue payments.

Interest claims are no problem for us and tha is one of the reasons why we are Australia’s No #1 Security of Payments Act Specialist – GET STARTED HERE…
Now at over $100 million in recovered Contractor Payments – RECOUP Contractor Debt Recovery are Trusted by more Industry Groups and Trade Associations throughout Australia than any other debt collection agency – many legal firms contact us for assistance when it comes to items like adding interest to payment claims.

RECOUP are Security Of Payments Act Experts & Debt Recovery and Debt Collection Specialists for Building and Construction Contractors. RECOUP aims to keep all stakeholders in each state up to date with changes and developments in each state’s legislation that impact claiming payments for building and construction work. To understand more about how to claim interest under your states Security of Payments Act legislation call us on 1300 732 687.

RECOUP provides information and assistance regarding the following legislation:

New South Wales: “Building and Construction Industry Security of Payment Act 1999″
Victoria: “Building and Construction Industry Security of Payment Act 2002″
Queensland: “Building and Construction Industry Payments Act 2004″
Australian Capital Territory: “Building and Construction Industry (Security of Payment) Act 2009″
South Australia: “Building and Construction Industry Security of Payment Act 2009″
Tasmania: “Building and Construction Industry Security of Payment Act 2009 (No.86 of 2009)”

Security Of Payments Act NSW 2013 Amendments

RECOUP warned of trouble ahead for Claimants and Respondents as a consequence of the Security Of Payments Act NSW changes that came into force on 21 April this year. And as we expected subcontractors are having to wait longer for payment and are wasting time and money on adjudication only to find out their payment claim is invalid. This can all be avoided.

The 2013 Amendments to the Building & Construction Industry Security Of Payment Act 1999 Apply Only to Contracts Entered Into On Or After 21 April 2014.

See the Security Of Payments Act NSW 2013 Amendments in full at the NSW Government Procurement website.

If you are a Claimant; your position is strengthened somewhat, but the danger of serving defective payment claims is increased dramatically.

If you are a Respondent; your degree of accountability will increase significantly, from now on you will need to treat all invoices as claims made under the Act, and in some cases you will have to pay claims sooner to be able to include that work in your claim to your client, and there will now be a maximum time for payment.

Changes To Security Of Payments Act NSW : “Due Date For Payment”

Principals now have to pay contractor claims within 15 business days, or sooner if the construction contract makes such a provision.

Contractors now have to pay subcontractors within 30 business days, or sooner if the construction contract makes such a provision.

And this is where you really need to be careful; Unless you have a written contract that expressly states what the payment terms are to be, and you are used to relying on the Act’s default of 10 business days, you will now have to wait up to 3 times as long to get your money or to be entitled to run your claim through adjudication under the Act.

Changes To Security Of Payments Act NSW : “Supporting Statement”

Head Contractors are now required to provide a supporting statement when submitting a claim to the principal. The Statement must include a declaration that all subcontractors engaged on the project have been paid what is due and payable. False declarations may attract penalties of up to $22,000.00 and / or 3 months imprisonment.

Proposed Changes To Security Of Payments Act NSW : “Payment Claims”

It will only be necessary for an invoice to state that it is a Payment Claim made under the Security Of Payments Act NSW if it relates to a residential construction contract.

This is proving to be a disaster for subcontractors. As the Act only allows on claim per Reference date (one claim per month) subcontractors submitting multiple invoices per contract in any one month are now in the position that all of these invoices are now invalid claims under the Act and need to sit on the sidelines until a new Reference date (new month) rolls around before they can serve another claim.

Unscrupulous builders are playing on this so be warned. The best solution is a written contract that specifically deals with times for making claims and time for payment. RECOUP helps many subcontractors modify their quotations a n contracts / agreements to ensure these problems don’t arise.

Security Of Payments Act Help - Contact Recoup Contractor Debt Recovery

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Adjudication

Adjudication for Building & Construction Industry Payment Disputes under the Security Of Payments Act Legislation.

RECOUP prepares adjudication applications if a claimant is at that stage or we can help you get to that stage and then see the entire Security Of Payments Act claim and enforcement process through with you to the collection of the debt. Your money in your bank.

Adjudication Is Fast, Low Cost & Favours Claimants

The purpose of the Security Of Payments Act is to ensure continuity of payment to subcontractors through a simple three step process that finishes at adjudication.

An adjudicator determines whether a claimant’s payment claim should be paid in full or if not to what amount, when the due date for payment is, and what rate of interest is payable.

If you are not being paid for work completed, or being told you can’t claim extra work as a variation, or are in a dispute over the value of work you have carried out , or you are being told you will get paid when your client gets paid, or are being ignored when you ask for retentions to be released at the end of the defects liability period, then adjudication is the solution for you.

RECOUP Contractor Debt Recovery prepares, lodges and manages adjudication applications from $5,000.0 up to and over $50M. We ensure all necessary submissions and supporting evidence are included to ensure every chance of success is likely.

But remember, once you apply to have a claim for work adjudicated if you are unsuccessful you cannot try again – you lose your entitlement under the Security Of Payments Act to do so.

That makes the quality of your Payment Claim very important, not to mention good supporting evidence in the form of detailed contract administration records.

Let RECOUP show you how to manage your contract administration, prepare bulletproff payment claims, and solid adjudication applications to ensure you get paid what you deserve.

1300 RECOUP Contractors Debt Recovery Contact Us For Security Of Payments Act Help

Security Of Payment Claim

A Payment Claim made under the Security Of Payment Act is the foundation of any Adjudication Application.

This means it must be prepared correctly.

And, most importantly, proper service of the Security Of Payment Claim must be effected on the respondent.

Security Of Payment Claim

Let’s take a closer look at what makes a solid Security Of Payment Claim.

Approved Date For Making The Security Of Payment Claim

Known as the “Reference Date”.

If you have a formal contract that expressly stipulates a date for making a claim each month than that is the date for making the claim.

If you don’t have a formal contract with a specified date for making a claim then it defaults to the last day of the named month.

You can claim for the preceding months work leading up to and including this date.

You cannot submit your claim early.

You cannot serve more than one claim per month.

Correct Legal Entities Of Both Parties In Full On The Security Of Payment Claim

What is a LEGAL ENTITY?

A lawful or legally standing association, corporation, partnership, proprietorship, trust, or individual. Has legal capacity to (1) enter into agreements or contracts, (2) assume obligations, (3) incur and pay debts, (4) sue and be sued in its own right, and (5) to be accountable for illegal activities.
Law Dictionary: http://thelawdictionary.org/legal-entity/#ixzz2kxDNli7c

It is imperative that you have the full and correct name of the entity that you formed the contract with clearly set out on the Security O Payment Claim.

You must also have the respondents address shown as their ordinary place of business, and if possible a Fax number. (more on this below under “Service”)

Proper Description Of The Work Being Claimed In The Security Of Payment Claim

To just say “bricklaying” is not good enough.

You must say what area of the job the claim relates to. You must describe in detail the part of the structure the claim relates to. You must describe in detail the works performed that the claim relates to.

Clearly State Amount Of Work Completed Included In This Security Of Payment Claim

To say “two days” is not good enough.

You must quantify the amount of works performed and the amount of materials supplied that the claim relates to.

Show How The Amount Of The Security Of Payment Claim Is Calculated

Just to say $1,000.00 + GST” is not good enough.

You must show either;

1) the total value of the whole of the contract work and the percentage completed that the claim relates to.

2) the unit cost of labour and the unit cost of materials and how many units performed / supplied that the claim relates to.

Effect Proper Service Of The Security Of Payment Claim

This is critical.

The best forms of service for you Security Of Payment Claim are, but not in any particular order;

a) Express Post

b) Courier

c) Licensed Process Server

d) Facsimile

Email is not recommended.

And critically the address for service must be the respondents ordinary place of business.

What Next !?!

The Respondent has 10 business days to either pay the Security Of Payment Claim in full or serve a Security Of Payment Act Payment Schedule on you.

To learn more about Security Of Payment Act Payment Schedules see https://recoup.com.au/security-of-payment-act-payment-schedule/

Why your Payment Claim may be invalid under the Security of Payments Act

A Payment Claim made under the Security of Payments Act is an intricate document that has specific requirements that need to be fulfilled and included in the Payment Claim so that it will pass through adjudication and win you your money with ease.

Below are a few issued that Claimants regularly stumble on in creating their own Payment Claim under the Security of Payments Act:

What State’s Security Of Payments Act Legislation Applies To Your Payment Claim?

As the Security of Payments Act is a state based legislation that may differ from state to state in Australia, the Security of Payments Act that you use in creating and serving your Payment Claim may be different from job to job. The Security of Payments Act legislation that is used for your Payment Claim is extremely significant; if the incorrect legislation is used then your Payment Claim will be deemed invalid under the Security of Payments Act and cannot be pressed.

Have I got the right person/company in accordance with the Security Of Payments Act?

Often people who issue their own Payment Claim do not address it to the correct entity. This often occurs when the Claimant is unsure of who they have been contracting with. This may be the case if you believe you are working for a company, but your contract is with an individual and it is unclear as to whether that individual is acting as an agent, or has formed the contract with you as a separate entity. If the Payment Claim has been addressed to the wrong person, it will not pass through Adjudication.

What is a reference date for the purposes of the Security Of Payments Act?

The Security of Payments Act makes reference to a ‘Reference Date’, another imperative facet to your Payment Claim. Depending on how formal your contract is and what payment terms have been specified, you may or may not have a Reference Date stipulated that needs to be followed. It is absolutely crucial that no more than one Payment Claim has been served per Reference Date; if this is the case then your Payment Claim will be invalid under the Security of Payments Act and cannot be pressed.

I sent them a Tax Invoice, does that count under the Security Of Payments Act?

Broadly speaking, a basic Tax Invoice is not a valid Payment Claim made under the Act and will not be regarded in the process set out under the Security of Payments Act.

In the seldom case that your Tax Invoice is a valid Payment Claim under the Security of Payments Act, and you have issued more than one Tax Invoice within the same Reference date, your Tax Invoice will be deemed invalid under the Security of Payments Act and will have no weight at Adjudication.

More often than not, people who have made Payment Claims under the Act without the aid of Recoup have failed to create and serve a valid Payment Claim under the Security of Payments Act… Contact Recoup today for a free review and consultation about how to proceed with your Payment Claim!

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Pay When Paid Provision

‘I’ll pay you when I get paid’ – This is Illegal under the Security of Payments Act!

If the person you have done work for (the Respondent) is not paying you because they have not been paid, this is not your problem!

Each Security of Payments Act legislation has in it a provision that prohibits the Respondent from withholding payment from you on the basis that they have not been paid yet by a Principal/Head Contractor.

Can the Principal Contractor withhold payment under the Security of Payments Act?

Depending on your state and situation, you may be able to issue a ‘Payment Withholding Request’ under the Security of Payments Act, prohibiting the Principal Contractor from paying the Respondent the amount outstanding to you until you have been rightfully paid.

If the Respondent still refuses to pay, the Principal Contractor under the Security of Payments Act is legally obliged to use the money they have withheld from the Respondent to pay you directly.

BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT NSW 1999 Section 26A: Principal contractor can be required to retain money owed to respondent “(1) A claimant who has made an adjudication application for a payment claim can require a principal contractor for the claim to retain sufficient money to cover the claim out of money that is or becomes payable by the principal contractor to the respondent. (2) Such a requirement is made by serving on the principal contractor a request (a “payment withholding request”) in the form approved by the Director-General of the Department of Services, Technology and Administration.”Section 26B: Obligation of principal contractor to retain money owed to respondent “(1) A principal contractor who has been served with a payment withholding request must retain, out of money owed to the respondent, the amount of money to which the payment claim relates (or the amount owed by the principal contractor to the respondent if that amount is less than the amount to which the payment claim relates).”

Can I stop work/supply under the Security of Payments Act?

Under the Security of Payments Act and depending on the situation you are in, you may be able to stop works and/or the supply of goods and services to the Respondent given you meet the specific timeline requirements set out in the Security of Payments Act relevant to your situation.

BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT NSW 1999 Section 27: Claimant may suspend work “(1) A claimant may suspend the carrying out of construction work (or the supply of related goods and services) under a construction contract if at least 2 business days have passed since the claimant has caused notice of intention to do so to be given to the respondent under section 15, 16 or 24.”

So if the person/company who owes you money has refused to pay you because they have not been paid, do not give up… use it to your advantage – contact Recoup today and ask what options are available to you for your individual situation.

Construction Site Diary – Why should I buy one?

The Diary designed by Recoup is an essential item on every project site no matter how big or small.

The Diary requires you to record all specific details of the people/company you have contracted with. This is crucial if a dispute arises and you wish to make a claim under the Security of Payments Act as there will be no dispute as to the entity that owes you the money.

One page spread is to be used for each day worked on site. This includes:

Contract Works Completed Today
Variations to Contract Works Completed Today

i. Authorised By?

ii. Authorised How?

Additional Works Outside of Contract works Completed today

i. Authorised By?

ii. Authorised How?

Client Instructions Received today
Authorities Approvals/Contact Today
Documentation Received Today
Weather Today
Delays Today
Photos taken today
General miscellaneous
Personnel onsite today
Today’s Record kept by?

This faultless Diary includes everything you will need to run a successful and profitable project site, which is crucial as project sites in the construction industry tend to become very chaotic and busy in their day to day running. With this site diary handy, you will not forget to record anything and this will benefit you immensely in the short and long term for the following reasons:

The Diary will ensure you are paid for all the works that you have carried out as you will record all works that you do and make sure all variations and additional works are documented, signed off by the appropriate personnel and therefore authorised. All the works you have carried out for the day will be organised in a concise and presentable manner, which will work in your favour shall your dispute land in Adjudication under the Security of Payments Act. The concise nature of the Diary will mean that you will not forget to charge for works you have carried out; hence making sure your Project site remains profitable and runs smoothly.
The Diary serves as Contemporaneous Evidence in the case of a dispute arising about payment due or works completed; that is, evidence from the exact point in time in which the incident in dispute occurred. This means that the any extract from the Diary used in the Adjudication process under the Security of Payments Act will be given more weight by the Adjudicator hence working in your favour.
The precise nature of the documentation required by Diary allows you to monitor the profitability and efficiency of your project site. Through being able to see exactly how much time and labour was used to carry out contract and/or variation works, you will be able to better allocate time, money, labour and other resources in the future on your project site.

At only $9.90* per site diary, the Construction Project Site Diary is an essential item on every project site. To order yours today, contact RECOUP now!

Security of Payment Act Claims – Best Way To Recover Debts In The Building & Construction Industry

If you have a choice between waiting 6 months to get paid or 6 weeks which would you choose ?

If you have a choice between spending tens of thousands of dollars or a few thousand dollars to get paid which would you choose ?

Of course you want to spend as least money as necessary and get paid as soon as possible.

Making A Claim Under The Security Of Payment Act Is The Way To Achieve This

SOPA claims are faster and cheaper than using expensive solicitors through a long drawn out court process.

By The Way We Take The Stress Out Of Trying To Manage A SOPA Claim Yourself

Many people come to us and ask for a few pointers to run a claim under the Act – big mistake !

All too often we see peoples paper work / invoices / payment claims and realise they are headed for failure.

We recover debts using the SOPA day in day out – stick to what you are good at and leave debt collection to debt collection professionals and you will have your money sooner.

Construction Site Diaries, Contract Variation Forms & EOT Claims

In our last Post we promised to ……

“detail the importance of Construction Site Diaries and General Contract Administration – especially for Contract Variations”

So here it is…. And its FREE !!

Note : Below is a Contract Variation Form for FREE – Our competitors charge anywhere between $60 and $1,500 for this form and not one of them covers all of the key items !

First and foremost you need to understand that you are bound by the Contract that you have entered into.

Generally speaking the Contract will require both parties to agree on any variation in accordance with the Contract’s Terms and Conditions.

For example, if the specification or the scope of the work changes causing costs to rise or fall or requiring the completion date to move in or out then the Contractor must provide a Variation with an Extension Of Time (EOT) Claim for the Principal to agree to (approve). Generally speaking most Building & Construction Contracts have time frames for such a process to be completed within.

A record of all Contract Variations & EOT Claims and Approvals thereof should written and circulated to all stakeholders at the time of the Claim and Approval – do not rely on verbal agreements.

As promised is a FREE Contract Variation Form

Click the icon obtain a copy of the Construction Variation Form.

Make every effort to use this form in every instance and do you best to obtain your clients authorisation / approval.

If for some reason the Contractor is pushed by the Principal to “get the job (variation) done and work out the details later” it is strongly recommended that a detailed record is kept by way of site diary to use as a reference of the facts as they happened (“contemporaneous evidence”).

To keep track of variations and all aspects of your works see our Construction Site Diary www.sitediary.com.au which is a simple and effective way to keep a reliable record of all of the daily activities & issues on a construction site.

A Construction Site Diary kept daily can be the most valuable evidence outside of the Contract itself in a dispute – it is well worth taking 15 minutes each day to keep it up to date.

Kept properly, and together with all necessary correspondence, a Construction Site Diary can be the basis of your Project Administration.

There you have it – be strict with the above and you will be on solid ground when you have a construction dispute or payment claim issue !

In the current uncertain times for the Building & Construction Industry getting all of the above right is more important than ever.

And never forget; Prevention Is The Best Cure.

Peace of mind that you have good admin and record keeping is worth its weight in gold ! Especially when you are having a payment claim determined at adjudication under the Security Of Payments Act legislation.

In our next Post we will detail the importance of the right “Debt Recovery Mindset”.

In the meantime please look through our website for information on how we may assist you further recoup.com.au

In most instances we use the “Building & Construction Industry Security Of Payments Act” for Construction Debt Recovery but not always – there are sometimes more appropriate options.

Traditional Debt Collection methodology can also be appropriate in certain circumstances.

Category: Recoup Insights

Contractors Debts Act 1997