Security of Payments for Contractors
Navigating Payments
Laws are in place to ensure contractors and subcontractors get paid, meaning good news for subbies and bad news for the payer if not prepared. What’s more, the laws are changing meaning increased payment security for subbies and more legal red tape for construction businesses. By calling upon a construction law expert you can make sure you’re informed about relevant legislation ahead of time to avoid getting caught up in expensive and time consuming litigation proceedings.
Know your payment obligations
Our lawyers understand that navigating the legal system and understanding your rights in cases involving your home can be very upsetting and stressful, which is why we offer clients specialist advice in plain English.
We pride ourselves on enabling you to understand your rights and to swiftly overcome construction hiccups, so you can get the home you’ve dreamed of and get on with living.
What you need to know
To get you started, here’s a few key things you need to know when embarking on a construction project or in the event that you discover a building defect:
Building defects can be major or minor, which as their names suggest, come with varying levels of complexity when it comes to making a claim. How a claim is settled is up to the parties involved and while is some cases may involve the simple, amicable and timely rectification of a defect, others may involve large compensation payments, expert determination and court proceedings.
Upon entering into your building agreement, your builder, given that they are licensed to complete the work, would have provided you with statutory warranties for the work commissioned. What this means to you is that, provided you are still within the warranty period, you are entitled to request the builder fix the defective or incomplete work. However, there are critical time periods that you should be aware of that need to be adhered to when it comes to making a claim against defective building work, to ensure your rights to pursue the builder are not lost.
- Non-completion claims – 12 months from the failure to commence or from the cessation of the building work.
- Non-structural defects – 2 years from the date of completion.
- Structural defects – 6 years from the date of completion.
By seeking legal counsel at the outset of the project you can be sure that you are covered and don’t miss out on any vital deadlines.
If you’re building a home and are unhappy with how it is progressing, the sooner you seek advice from a construction lawyer, the better. Knowing your rights throughout the building process and swiftly and efficiently processing claims against defective building works early on in the piece can ensure the avoidance of unnecessary legal red tape and stressful disputes.
In circumstances where the builder has failed to complete the works by the practical completion date you will need to terminate your contact with the builder first before you are able to make a claim under the insurance scheme. There are various avenues available to you in terminating your contract however these would vary depending on the circumstances and the terms of the particular contract.
It is important that you seek legal advice in going down this path so that you ensure that you terminate your contact properly as a contract not terminated properly will void your insurance and will be prevent you for being able to proceed with an incomplete works claim with your statutory insurer.
Thinking about approaching a defective claim against a builder or developer without legal advice? Think again. When negotiating over a building defect, more often than not a builder will try to gain some release from contractual obligations into the future as part of the arrangement, which may be detrimental if you need to make another claim down the line. Don’t take the risk and seek advice when pursuing a claim.
In the event of a defective claim against building work, more often than not the builder will prefer to return and carry out remedial works to avoid having to pay compensation or incurring the expense of a third party completing the rectification. If for whatever reason you don’t want the builder back at the property to rectify the defects, you should seek legal advice on your options.
The New South Wales Home Warranty Insurance Fund is a statutory insurance scheme that provides insurance cover for certain residential construction work valued at more than $20,000. The NSW scheme provides protection for consumers where:
- There has been faulty or incomplete work on residential buildings.
- The builder becomes insolvent, dies or disappears.
- The builder’s licence is suspended or cancelled by NSW Fair Trading.
A homeowner seeking to make a claim under the New South Wales Home Warranty Insurance Fund must first give written notice using the Loss Notification Form to the insurance agent who issued the Certificate of Insurance. A homeowner must then take action to try and resolve the dispute with the builder and to have the builder complete and/or rectify the subject building work. Strata defects are covered by the insurance fund, however, the claim must be issued on behalf of the Owners Corporation.
The Queensland Home Warranty Scheme is a statutory insurance scheme that provides insurance cover for certain residential construction work valued over $3,300. Its purpose is to provide protection for consumers for non-completion, defective construction and subsidence. The scheme usually covers construction of and repairs to the single detached dwellings, residential units and townhouses of three storeys or less. A homeowner can make a claim on the insurance scheme by lodging a Complaint Form with the Queensland Building and Construction Commission.
