Need to know how progress claims apply to home building work?
Great. We have the answers for you.
This article will give you a complete rundown on how progress claims apply to home building work from both a builder and a contractor’s perspective.
Before we get started, you need to be aware the Home Building legislationhas its own rules on payment claims. So as not to confuse the Home Building legislation with the Security of Payments legislation, we’re only going to talk about Progress Claims for Security of Payments.
Can builders make Progress Claims for Home Building Work?
This depends. The main thing you need to be aware of is if your client is the consumer who will live in the place where the work is being carried out then unfortunately, you are out of luck. Builders cannot make progress claims against clients who intend to live in the premises.
However, builders can make progress claims for home building work if the client does not intend to live in the premises. Be smart and determine this at quoting stage. This way you can ensure that when you conduct your due diligence and prepare your construction contract, you will be able to cover the Security of Payments Law requirements.
What about contractors?
Now this is the fun part. Builders and contractors please read this.
Similar to builders, contractors cannot make progress claims against clients who intend to live in the premises. However, contractors can make progress claims against builders for home building work.
Essentially, the home builder is caught out in this situation. He cannot make claims to his client, and his contractors can make claims against him. (To be honest, we think the Government went a little overboard when they made up these laws).
Now, let’s look from a builder’s perspective: “How do progress claims apply to home building work?” Well, the answer is they don’t. On the flipside, if you ask the same question from the contractor’s perspective “how does Progress Claims apply to Home Building work?” and it’s good news.
If you are a contractor doing home building work then you should get clued up on the Security of Payments Law or get yourself Security of Payments Software. Making sure you dot your i’s and cross your t’s with progress claims against your builder is the smartest and easiest way to manage your cash flow.