On 28 February 2011 amending legislation for the Building and Construction Industry Security of Payment Act (NSW) (‘the Act’) was made which assists sub-Contractors secure payment of progress payments under Contracts for construction work.
Before the amendments, if you were a sub-Contractor owed money you had to go through the process of having an adjudication application made and still not be sure of being paid because the Respondent to that application might “do a runner”.
The changes to the Act have now make it possible to require a Principal Contractor to retain sufficient money to cover your claim out of the money that is or becomes payable by the Principal Contractor to the person or entity who might have done the runner.
The legislation effectively freezes money quickly to keep it in the hands of the principal or higher level Contractor before it is paid to the person or entity wanting to take the money and run.
Once the adjudication application has been dealt with, the principal or higher level Contractor releases that money to you under the award or adjudication.
Problems associated with recovering money as a sub-Contractor have been alleviated. The Act now has a sensible mechanism to assist sub-Contractors and give real meaning to the term “Security of Payment”.
Securing the profitability of your business is important. The law is complex. King Cain specialises in business law, debt recovery and commercial litigation.
King Cain can assist you on any legal matter, feel free to phone us on 6333 4400, or call into our office at Level 1, Suite 4, 90 Keppel Street Bathurst for an appointment.