Getting paid in the construction industry can sometimes be challenging. The good news is that there are a range of options that you can pursue to get paid. The course of action you take to enforce your right to payment will depend on a number of factors. One option to pursue is a subcontractors’ charge.

The Building Industry Fairness (Security of Payment) Act 2017 (QLD) (the BIF Act) regulates subcontractors’ charges in Queensland. This article explains what a subcontractors’ charge is and sets out the process of making a subcontractors’ charge in an easy to understand question and answer format.

What is a subcontractors’ charge?

A subcontractors’ charge is a means to enforce a payment right. If you are a subcontractor, a subcontractors’ charge can be used as a way for you to secure monies owed to you by a contractor. This is achieved by placing the higher contractor (for example the contractor higher in the chain or the principal) on notice to redirect money owed to the contractor to you.

As the above suggests, there are usually 3 parties involved in a subcontractor’s charge. These would typically be:
• a subcontractor engaged by a contractor to perform construction work or supply related goods and services pursuant to a subcontract agreement (the Subcontractor); and
• a contractor engaged by a principal to complete the construction work pursuant to a construction contract (the Contractor); and
• a principal who engaged the contractor to complete the construction work and owes money to the contractor pursuant to a construction contract (the Principal).
In circumstances where the Principal is not the owner of the land, you may be in a position to ‘leap frog’ the Principal and file a subcontractors’ charge against the owner of the land directly.

When is a subcontractors’ charge available?

Before you go-ahead and lodge a subcontractors’ charge, you must ensure that, the:
• monies owed to you as a Subcontractor arise out of “work” as defined in section 105 of the BIF Act; and
• claim for payment must be in relation for work done under a subcontract (i.e. you must be a Subcontractor).
In addition, it is important to note that a subcontractor’s charge is only available where there is money owing to the Contractor by the Principal. If monies are indeed owing, then any charge will be limited to the amount owing by the Principal to the Contractor. By way of example, if a Subcontractor is owed $10,000.00 but the Contractor is only owed $7,000.00 by the Principal, the subcontractors’ charge will be limited to $7,000.00 only.

How is a subcontractors’ charge made?

The BIF Act requires that a Subcontractor is to give written notice to the Principal (the person obliged to pay monies to the Contractor), with a copy to the Contractor (the person that owes money to the Subcontractor). This can be done by completing an approved form as issued by the Queensland Building and Construction Commission.
It is important to note that section 122 (2) of the BIF Act states that the notice must be in the approved form and must:
• state the amount of the claim; and
• include details of the work done as certified by a qualified person; and
• include the other information prescribed by regulation.
To ensure compliance with the BIF Act, you must complete the form accurately.
In addition, the amount of the claim must be certified by a qualified person. Section 147 (1) of the BIF Act states that a qualified person is:
• an architect registered under the Architects Act 2002; or
• a registered professional engineer under the Professional Engineers Act 2002; or
• a person licensed under the Queensland Building and Construction Commission Act 1991 to carry out or supervise work of the type to which the claim relates; or
• a quantity surveyor who is a member of the Australian Institute of Quantity Surveyors; or
• a person having expert knowledge of the work to which the claim related and who is accepted in a particular case as a qualified person by the contractor and subcontractor.
It is important to note that if the works have been completed, the notice of claim must be given within 3 months after practical completion of the work.

What happens if you don’t have any information about the Principal?

You may rely on section 119 of the BIF Act to obtain any relevant information from the Contractor that would be necessary to give a notice of claim.
Section 119 of the BIF Act requires a Contractor to provide, within 10 business days of being notified in writing, the name and address of the Principal together with any other details that would enable a Subcontractor to give a notice of claim to the Principal. A failure to comply will result in a maximum penalty of 20 penalty points.

Do I need to provide a copy of the notice to the Contractor?

Yes. A copy of the notice must be served on the Contractor. If a Subcontractor fails to serve the notices as required by the BIF Act (that is to the Principal with a copy to the Contractor), the notices shall be of no effect resulting in the subcontractors’ charge not attaching.

What happens after the notice is served?

Both the Principal and the Contractor may be required to take action if they are in receipt of a notice.

The Principal
The Principal, must, until a court order is made in respect of the amounts claimed, retain the amounts that is or is to become payable to the Contractor. The Principal can do so by holding the monies itself or generally in most circumstances paying the monies into Court.
If the Principal fails to do so, the Principal may become personally liable to pay to the Subcontractor the amount of the claim (to the extent of the amount the Principal is required to retain).

The Contractor
The Contractor, must, within 10 business days respond to both the Subcontractor and the Principal. The response must be made on the prescribed form and must state whether the claim is accepted (in whole or in part) or rejected. Any amount that is accepted by the Contractor is to be paid by the Principal to the Subcontractor (where the Principal is holding monies that are payable to the Contractor).
In circumstances where the Contractor rejects the amount sought in the notice, where there are funds captured by the notice, then those funds will be deposited into Court.

How do you enforce a subcontractors’ charge?

Where a notice has been validly served and the amounts claimed are disputed, a Subcontractor must commence Court proceedings to enforce the subcontractors’ charge. It is important to note that the BIF Act requires that Court proceedings are to be commenced within one month of the date of the notice, unless it is a claim of subcontractors’ charge in respect of retention monies, in which case Court proceedings must commence within four months after the retention money becomes payable. A failure to comply with the timeframes for commencing Court proceedings shall result in any charge being extinguished.

What are the benefits of issuing a notice?

If you’ve issued a notice and the Contractor subsequently goes into liquidation, you will be classed as a secured creditor. As a secured creditor, you hold priority over other creditors.

What are the pitfalls of a subcontractors’ charge?

Strict Compliance
The BIF Act sets out various requirements that must be met and a failure to strictly comply with the requirements of the BIF Act may result in a subcontractors’ charge not attaching/being invalid. In addition, there must be strict compliance with time frames.

No money or security
As previously mentioned, a subcontractor’s charge is only available where there is money owing to the Contractor by the Principal or where the Principal is holding some form of security. As a result, where a Principal has, prior to receiving a notice, already paid a Contractor, a subcontractors’ charge would not be of effect.

Insufficient money or security

A subcontractors’ charge is limited to the amount owing by the Principal to the Contractor. Furthermore, where there are multiple claims, any secured money will be allocated in accordance with the proportion of each claimed lodged.

Court Proceedings
In order to enforce a subcontractors’ charge, a Subcontractor must commence Court proceedings to enforce the subcontractors’ charge.

Affects Relationships
A subcontractors’ charge should only be used as a measure of last resort – in circumstances where the Contractor is experiencing cashflow problems and you’re certain that the Contractor will not be in a position to pay you. A Contractor that is the subject to a subcontractor’s charge that is unmeritorious is unlikely to give you further work.

If you are a Subcontractor and you are owed monies, a subcontractors’ charge can be an effective means to recover monies due and owing. However, there must be strict compliance with the BIF Act in order to make a valid subcontractors’ charge. If you think you may be entitled to recover monies due and owing to you by way of a subcontractors’ charge, it is strongly recommended that you get advice from experienced building and construction lawyers.

Rostron Carlyle Rojas have an expert team of building and construction lawyers. If you have a question or you’d like more information on the content of this article, contact us today on (07) 3009 8444 or email us at [email protected].

Purchasing a new home, building a new home, or renovating a home? Here is the ultimate guide to all grants and concessions available in Queensland.

What is available?
Grants
• HomeBuilder grant: $25,000.00
• Queensland First Home Owners’ Grant: $15,000.00
• Regional home building boost grant: $5,000.00
Stamp duty Concessions
• First home concession
• Home concession
• First home vacant land concession
Scheme
• First home loan deposit scheme

Queensland Government Financial Grants

Grants and eligibilities below are only available for Queensland property purchases

*if you buy an off the plan dwelling after 4 June 2020, and the construction of the home commenced before 4 June 2020, then the home does not qualify for HomeBuilder.

Queensland Stamp duty Concessions

You might not lose the concession because of an intervening event. We can apply on your behalf in writing to the Commissioner of State Revenue explaining these reasons.

First home loan deposit scheme

The scheme and eligibilities apply throughout Australia. It is important to note that an application for this scheme can only be made by banks who the Government have selected can participate in the scheme. The banks are listed in the link: https://www.nhfic.gov.au/what-we-do/fhlds/how-to-apply/#FHLDSlenders
First home buyers with less than 20% of deposit will need to pay lenders mortgage insurance. With the scheme eligible first home buyers can purchase a home with 5% deposit. This is subject to lenders criteria.

To be eligible you must satisfy the below: –
– Australian Citizen;
– At least 18 years of age;
– You and your spouse never owned a residential property before;
– Purchase as an individual (not company or trust);
– Must be purchasing a residential property in Australia;
– Must live in the property as your principal place of residence;
– Taxable income must be below $125,000.00 for individual or $200,000.00 as a couple for the preceding financial year;
– Must purchase within the price threshold; and
– You must demonstrate savings equivalent to at least 5% but not more than 20% of the residential property you intend to buy.

To determine whether a buyer is eligible to any of the grants, concessions and schemes it is important to assess each situation on a case by case basis. Whether you are eligible will be determined by your individual circumstances.

Rostron Carlyle Rojas Lawyers can explore your options with you ensuring that you gain the most out of the government Grants and Concessions available. If you have any questions or would like more information regarding the above please contact any of our property experts below.

In a continued effort to support COVID-19 recovery and boost a struggling construction industry, the NSW Government will half land tax for developers of build-to-rent housing for the next twenty years.

A ‘build-to-rent’ model, which is well established in the United States and Britain, refers to a residential development scheme where the developer retains rather than sells off units and acts as the property manager. In the Government’s recent media release, NSW Treasurer Dominic Perrottet said that “Build-to-rent is popular overseas but still in its infancy in Australia, and we want to remove barriers and allow this segment of the market to grow”.

To be eligible for the land tax reduction, build-to-rent developments in metropolitan areas must be at least 50 units, unified under single ownership and include options for long tenancies. Construction of the development must also have commenced on or after 1 July 2020. It is expected that the Government will release the full eligibility criteria, as well as confirm the requirements for regional areas, in the coming weeks.

The NSW Government hopes that the build-to-rent scheme will offer renters greater choice and affordability as well as help boost certainty and jobs in the construction industry as Australia recovers from the economic impacts of COVID-19.

In addition to land tax cuts, the NSW Government is also exhibiting a new streamlined Housing
Diversity State Environmental Planning Policy to help support investment in diverse and affordable housing types, including co-living, short and long-term rentals, and social and student housing. The policy also encourages build-to-rent developments as a means of meeting NSW’s future housing needs. The Housing Diversity policy is on exhibition and inviting feedback until 9 September 2020.

The NSW Government’s full ministerial release can be viewed here.

As specialist construction lawyers, we act for a number of clients in adjudication proceedings. This guide sets out the adjudication process in a succinct and easy to understand manner.

What is adjudication?

The Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) commenced on 17 December 2018. The Act provides for adjudication, which is a streamlined dispute resolution process that allows a party that has executed construction work or provided related goods and services to recover a disputed or unpaid progress payment.
Adjudication is a statutory based, alternative dispute resolution process where a qualified person, known as an adjudicator, is tasked with making a determination with respect to a payment dispute between parties. As adjudication is an alternative dispute resolution process, it falls outside of the court system and is relatively cheaper than litigation

When can an adjudication application be made?

Adjudication is run on very strict timelines. Clause 79 of the Act sets out the timeframes that determine when an adjudication application can be lodged. The table below sets out how and when an adjudication application can be made.

It is crucial that you adhere to the timeframes within which an adjudication application is to be filed. If you do not comply with the deadlines within which you must file an adjudication application, your adjudication application may be dismissed. Furthermore, it must be lodged on a business day, before 5:00 pm (AEST). It is important to note that any applications lodged after 5:00 pm (AEST) on a business day will be taken to be lodged the next business day.

Where can an adjudication application be made?

An adjudication application is lodged with the Registrar of the Queensland Building Construction Commission (QBCC).

What is usually contained in an adjudication application?

The Claimant (i.e. the person making the application) must complete the QBCC adjudication application form which is usually accompanied by the following:
• written submissions,
• a copy of the payment claim;
• a copy of the construction contract;
• a copy of the payment schedule (if there is one); and
• other supporting documents that may be relevant to the adjudication application.
You must also serve a copy of the adjudication application on the Respondent.

What happens once an adjudication application has been lodged?

After the adjudication application has been lodged, the QBCC must, within 4 business days of receipt of the adjudication application, refer the adjudication application to an accredited Adjudicator. If the accredited Adjudicator accepts the appointment as Adjudicator, he must serve the parties with a notice of acceptance within 4 business days after receiving the referral.

What happens once an Adjudicator has been appointed?

Once an Adjudicator has been appointed, the Respondent must file an Adjudication response within the later of the following periods:
(i) for standard claims (i.e. claims that are less than $750,000.00), 10 business days after being served with an adjudication application or 7 business days after being served with a notice of acceptance by the adjudicator; and

(ii) for complex claims (i.e. claims that are greater than $750,000.00), 15 business days after being served with an adjudication application or 12 business days after being served with a notice of acceptance by the adjudicator.
If an adjudication response is filed out of time, the Adjudicator will not consider it.

The adjudication response must be in writing and must identify the adjudication application to which it relates and may include written submissions.

It is important to note that the Act prohibits a Respondent from filing an adjudication response if the Respondent has not submitted a payment schedule. Furthermore, an adjudication response must not contain reasons that were not recorded in the payment schedule.

What happens after an adjudication response is filed?

The Adjudicator must now consider the adjudication application and the adjudication response and must then decide on the matter. The Adjudicator would ordinarily determine whether the Respondent owes the Claimant any monies, the date on which such monies became due and any interest.

The Adjudicator is required to hand down a decision within strict time frames. An Adjudicator must make a decision no later than:
(i) for standard payment claims, 10 business days after the adjudicator is given the adjudication response and where no adjudication response has been given, the last day on which the adjudicator receives the response; or

(ii) for complex payment claims, 15 business days after the adjudicator is given the adjudication response and where no adjudication response has been given, the last day on which the adjudicator receives the response.

What happens after an Adjudicator makes a decision?

The answer to this question depends on whether or not the Adjudicator awards an amount to be paid.

If the Adjudicator decides that an amount is to be paid by the Respondent, the Respondent is required to pay the amount to the Claimant on or before the day that is 5 business days after the day on which a copy of the Adjudicator’s decision is given to the Respondent by the Adjudicator or if the Adjudicator decides a later date for payment, then by such later date.

What is an adjudication certificate?

An adjudication certificate is usually only issued where the Respondent is required to pay an amount.

As soon as practicable after being given a copy of the decision by the Adjudicator, but no later than 5 business days after being given the decision, the QBCC must give the Claimant an adjudication certificate of the decision which sets out the following details:

(i) the name of the Claimant;

(ii) the name of the Respondent;

(iii) the adjudicated amount;

(iv) the date on which payment of the adjudicated amount is required to be paid;

(v) the rate of interest that is applicable; and

(vi) the costs that the Respondent is required to pay.

What happens if payment of an adjudicated amount is not made?

If the Respondent fails to make payment in whole or in part, the Claimant may:
(i) give the Respondent written notice of the Claimant’s intention to suspend works or supplying related goods and services; and/or
(ii) file the adjudication Certificate as a judgment for a debt.

As the above suggests, adjudication is a quick, cost effective method of getting paid for construction works or supplying related goods and services.

However, in order to ensure that your rights are protected and preserved, it is imperative that the provisions of the Act, in particular the strict time frames, are complied with.

Rostron Carlyle Rojas have an expert team of specialist building and construction lawyers.

If you have a question or you’d like more information on the content of this article, contact us today on (07) 3009 8444 or email us at [email protected]

My building contract does not provide for due dates for progress payments – am I still entitled to progress payments? I’ve been served with a payment claim under my building contract – now what? I need construction law advice – I’ve not been paid the amount the adjudicator has awarded me.

As building and construction law experts, these are examples of the type of questions we routinely get asked by some of our clients. We’ve compiled a list of some of the common questions we get asked. In this article, we explore the answers to some of these common questions.