Construction Lawyer & Building Solicitors Sydney | Contracts Specialist Law Firm

How to Deal with Payment Disputes?

Resolve your payment dispute by enforcing your right to Security of Payment. The act protects you from being unpaid, paid late, or underpaid so you better get paid what you deserve.

Consult with Contracts Specialist now and we will guide you step-by-step in any legal process involved in your payment dispute.

The first consultation is free.

Payment Dispute

A payment dispute is a type of construction dispute that involves money matters. This could be caused by factors such as late payment, non-payment or underpayment.

This situation can be alarming for contractors since their business is on the line when a payment dispute happens. Late payments can disrupt a contractor’s cash flow, which can lead to more serious problems. They might have trouble with buying materials, paying employees, and even go bankrupt.

So, it becomes essential for contractors to enforce their right to get paid with what they deserve. To help with your payment dispute, the Security of Payment Act makes sure that you get paid on time. Especially when undergoing the necessary legal processes.

Enforcing your right to Security of Payment

The Security of Payment Act safeguards your right to receive the money for work done through progress payment. The act helps homeowners to rely on a process to recover any money from progress payment that they should be receiving.

This includes the right to claim for interest and suspend work when needed. You also have the right to take your dispute to adjudication or a tribunal if it resolves your dispute.

These things make resolving payment disputes easier because a contractor would just have to prepare the necessary papers to claim the money. Of course, it will still depend on how hard it is for you to reach your builder in your talks.

Ways to Resolve Payment Disputes

Depending on how grave is your situation with your builder, there are various ways to resolve a payment dispute.

 

Initial Negotiations

First, you must talk to your builder about any issues on payment as soon as they come up. If you can settle the payment dispute by talking it through, then there is no need to further legal process. You may just now follow the prescribed time frame in your contract for your progress payment.

Enforcing your Payment Claim and Payment Schedule

To further make sure that everything in the construction phase is going according to plan, do not forget the essentials. This includes making a payment claim and receiving a payment schedule, keep track of the money your builder owes you.

Of course, these two documents can be handy in a payment dispute. It serves as a proof on who did not pay on time or if you gave out higher costs. A payment claim can show how much they owe you, making easier to see how much money do you need. Likewise, a payment schedule can help you determine the exact time you will get paid.

Adjudication

It is disappointing if you have kept track of your payment claim and payment schedule but you are still unpaid. If you know that you did your best to work on this building project, try going for adjudication first with your builder.

Debt Recovery through Court Trial

But even if the adjudicator’s judgement did not help resolve the problem, then take the payment dispute to court. You may try to recover their debt through the help of tribunals such as Fair Trading or NCAT.

These tribunals have certain legal processes they have to follow in order for you to enforce your rights. The process will be more tedious than adjudication, so it is seen as a last resort to your problem. But, it is also seen as solid enforcement of the law.

Payment Dispute Resolution Process

In resolving a payment dispute, these are the steps that you and your builder can apply to find a solution to your issues:

  1. Enforce your payment claim to your builder.
  2. Make sure they reply with a payment schedule.
  3. If you have disagreements on the claim or on the schedule, file for adjudication.
  4. Undergo adjudication and wait for a decision within 10 business days.
  5. If they still have other complaints or they don’t pay the adjudicated amount, then you may take it to court.

This flowchart shows how the Security of Payment Act is fully enforced, where you can get the opportunity to get your money back.

Why quickly act on a payment dispute?

You should quickly act on a payment dispute because your cash flow is at stake here. You must be able to be assertive on the money you have worked hard for, so you can avoid problems. If payment disputes are easily settled, then delays could be prevented too.

Payment disputes are too common in Australia so you must be wary about them. Make sure to have fixed time frames and a payment schedule before you start construction. If you know exactly when should you be paid, you can easily determine if your builder is paying you late.

And if you can easily know if the builder is paying you late, you get to quickly act on it before it turns into a payment dispute.

Resolve your Payment Disputes

Contracts Specialist can help you act or even prevent a payment dispute. We can help you set up you set up progress payment so you get to be paid on a fixed schedule. We can also help you with applying for adjudication, so you get to enforce your right to Security of Payment.

With our help, you are sure to be guided with the legal processes needed to resolve your payment dispute. We will help you understand your rights in your situation, and advice you on which way you should resolve it.

To get help on your payment dispute, book a consultation now. The first one is FREE.

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