Understanding the Progress Payment Clause in the HIA Contract
The HIA Lump Sum Contract is a commonly used contract for home building in NSW. It sets out the terms and conditions of the contract between the homeowner and the builder. The contract includes a progress payment clause that requires the builder to submit progress claims to the homeowner for payment.
Clause 17 of the HIA Contract sets out the details of the progress payment process, including the frequency of the progress claims and the payment schedule. The payment schedule must be provided by the builder to the homeowner in response to each progress claim.
It is essential to understand the terms of the progress payment clause to know your rights and obligations under the contract. If the homeowner receives a progress claim and believes that the builder is not entitled to payment, it is crucial to take prompt action to protect their interests. Understanding the contract’s progress payment clause and the relevant laws, such as the Building and Construction Industry Security of Payment Act 1999 (NSW), is crucial to taking appropriate action.
Progress Payments in NSW
In New South Wales, the Building and Construction Industry Security of Payment Act 1999 (NSW) regulates progress payments for construction projects. This legislation ensures that contractors and subcontractors are paid promptly for work they have done. The Act requires that a payment schedule be issued by the respondent (typically the homeowner) within a specific time frame after receiving a payment claim from the claimant (typically the builder). The payment schedule must specify the amount of payment that the respondent proposes to make, and if it is less than the claimed amount, the reasons for withholding payment. If the respondent fails to provide a payment schedule within the required time frame, they become liable to pay the claimed amount to the claimant on the due date for the progress payment.
IV. Difference between Progress Claims and Payment Claims
V. What to Do When You Receive a Progress Claim without Reference to the Building and Construction Industry Security of Payment Act 1999 (NSW)
When a homeowner receives a progress claim without any reference to the Building and Construction Industry Security of Payment Act 1999 (NSW), the homeowner may be unsure of their rights and obligations. Firstly, it is important to understand that even if the progress claim does not mention the Act, the Act still applies to the contract if it meets the criteria of the Act. The homeowner should carefully review the contract, particularly Clause 17 of the NSW HIA Lump Sum Contract, which sets out the progress payment schedule. If the builder has not followed the schedule, the homeowner may be entitled to withhold payment until the builder rectifies the breach. If the homeowner believes that the builder is not entitled to payment, they should seek legal advice promptly. Homeowners can also issue a payment schedule, which outlines the amount that they believe is payable, but this should be done carefully and with legal advice. Finally, if the builder continues to demand payment, the homeowner may need to initiate dispute resolution procedures or consider legal action.
VI. How are Progress Payments Calculated?
Progress payments are calculated based on the amount of work completed by the builder, as well as the cost of materials and other expenses incurred. The amount of each progress payment is typically determined by the construction contract, which should include a schedule of progress payments. This schedule will outline the percentage of the contract price that will be paid at various stages of the project. The builder should provide the homeowner with an invoice or progress claim that outlines the work completed, the materials used, and any other expenses incurred. The homeowner should carefully review this documentation to ensure that the progress claim is accurate and that the builder is entitled to the payment claimed. If there are any disputes or concerns about the progress claim, the homeowner should seek legal advice.
Final Progress Claim and Completion of the Project
Once the project is complete, the builder will submit a final progress claim for the remaining balance of the contract sum, which will be paid upon certification of the work by the certifier or engineer. The final progress claim will include all of the work completed up to that point, less any amounts previously paid under the progress payment schedule. As with previous progress claims, the homeowner should carefully review the final progress claim and ensure that it accurately reflects the work that has been completed. If there are any disputes or disagreements, the homeowner should seek legal advice to determine their rights and options. It’s important to note that if the builder has not complied with their contractual obligations or the Building and Construction Industry Security of Payment Act 1999 (NSW), the homeowner may have a right to withhold payment until the builder rectifies any issues.
Security of Payment Progress Claim
A Security of Payment progress claim is a formal process under the Building and Construction Industry Security of Payment Act 1999 (NSW) that allows contractors to secure payment for work that has been completed. This process allows contractors to make a claim for payment even if the contract between the parties does not include a payment schedule or if the payment schedule has not been followed. To make a Security of Payment progress claim, contractors must follow strict requirements and timelines set out in the Act. Homeowners who receive a Security of Payment progress claim should seek legal advice immediately to ensure that they understand their rights and obligations under the Act.
Security of Payment Progress Claim
A Security of Payment progress claim is a formal process under the Building and Construction Industry Security of Payment Act 1999 (NSW) that allows contractors to secure payment for work that has been completed. This process allows contractors to make a claim for payment even if the contract between the parties does not include a payment schedule or if the payment schedule has not been followed. To make a Security of Payment progress claim, contractors must follow strict requirements and timelines set out in the Act. Homeowners who receive a Security of Payment progress claim should seek legal advice immediately to ensure that they understand their rights and obligations under the Act.
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Conclusion
In conclusion, receiving a progress claim without reference to the Building and Construction Industry Security of Payment Act 1999 (NSW) can be a complex issue for homeowners building their dream home with a builder. It is crucial for homeowners to understand their rights and options when it comes to progress claims and progress payments under the NSW HIA Lump Sum contract. Seeking advice from a specialist construction lawyer that can provide invaluable guidance and support throughout the process.
It is important to note that progress claims and progress payments can differ from project to project, and the terms of the HIA contract must be carefully reviewed. Homeowners should not hesitate to seek clarification from your builder or legal counsel if you have any questions or concerns.
