Security Of Payment Process
The Security Of Payment process is streamlined to help construction contractors get paid sooner, and with minimal outlay.
How To Use The Security Of Payment Act Legislation When Making Your Construction Claim ?
Used correctly, the Security Of Payment Act legislation is close to unbeatable when it comes to claiming for money owed for building & construction work
You Must Meet The Statutory Requirements & Time Frames Of The Security Of Payment Act When Making Your Claim
There are several key requirements that you need to satisfy for your Payment Claim, subsequent notices, and adjudication application to be valid under the Security Of Payments Act.
Firstly – Preparing the Payment Claim
Preparing the Payment Claim is critical to success at adjudication. If the adjudicator is not satisfied that the payment claim meets all of the statutory requirements of the Security Of Payment Act then you have to go back to square one. But, and this is a big but, if you are then outside of the time allowed for making claims or there are no more reference dates available, then you can no longer run that claim under the Security Of Payment Act.
So, preparing a claim properly is critical both to opportunity and success.
Secondly – Serving the Claim
Serving the Payment Claim properly is as important as preparing a claim properly. The Security Of Payment Act sets out strict statutory requirements for the service of all notices, including payment claims, served under the Security Of Payment Act.
Thirdly – When and Why to Serve 2nd Notices
Preparing & serving the “2nd Notice” may or may not be necessary. The way the Security Of Payment Act process works in broad terms is this:
Step 1: Claimant serves payment claim on or after available reference date.
Step2: 10 Business day period allowed for the respondent to serve a payment schedule in reply to the payment claim.
Step 3: If no payment schedule served on the claimant by the respondent within the time allowed, the claimant, providing the due date for payment has passed, must serve a 2nd notice on the respondent
Step 4: 5 Business day period allowed for the respondent to serve a payment schedule in reply to the 2nd notice.
Step 5: Respondent serves payment schedule on claimant within either of the two periods of time allowed
Step 6 Claimant then has 10 business days after receipt of the payment schedule to apply for adjudication, or if still no payment schedule served then the claimant must apply for adjudication within 20 business days of the end of the 5 business day period
Fourthly – What Constitutes a Payment Schedule
Understanding the Payment Schedule requires expert assessment. It is critical to determine whether a payment schedule, or any reply to a payment claim for that matter, meets the statutory requirements of the Security Of Payment Act.
Fifthly – Apply for Adjudication
Applying For Adjudication is, as each step leading up to it, a critical process. A successful application will contain submissions and supporting evidence that satisfy and adjudicator that they have jurisdiction and and that a claimant has an entitlement to be paid in full.
And it is as simple as that. If you can tick all of the above boxes then you have a valid Payment Claim made under the Security of Payments Act and and you will most likely be successful at adjudication .
Security Of Payment is a straightforward process but like all things in the building & construction industry you must get the technical details right to ensure successful debt recovery and collection.
Security Of Payment legislation details the unique requirements for each state so have a read and call to ask any questions as required. (The examples / process outlined above is based on the Building & Construction Industry Security Of Payment Act 1999 (NSW) legislation).