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Security Of Payment Act Changes |
Changes to the Building and Construction Industry Security of Payments Act provide a more favourable process for contractors and sub-contractors to obtain progress payments. The changes are designed to overcome some anomalies highlighted by recent Court decisions. Changes include:
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- The Act now applies to final payment claims and claims for one-off payments as well as to progress claims.
- Removal of the option for the owner to provide a bank guarantee for payment in relation to a claim or adjudicated amount and instead requiring actual payment.
- Preventing an owner from bringing a cross claim or raising a defence under the building contract in Court proceeding bought by the contractor to enforce payment of a statutory debt arising under the Act.
- Providing for interest on the unpaid amount of a progress payment.
- Allowing a builder to exercise a lien over unfixed plant or materials supplied by the owner where the owner has not paid a statutory debt under the Act.
- Limiting the period in which a payment claim may be given to 12 months after the work the subject of the claim was last carried out; and
- Providing for the issue of a "adjudication certificate" which can be issued by an adjudicator and then filed as a judgement in a Court.
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Adjudication of progress claims under the Act does not result in a final resolution. A claim can only be finally resolved by agreement, by dispute resolution procedures under the Contract (if available) or by Court proceedings. This underlines the importance to both parties of having a well drafted contract. |
