You know the action films where the good guy tries to stop the bomb exploding as you hear it’s ticking sound? If you’re a builder who’s received a Progress Claim, you too are staring at a ticking time-bomb that can put your cash flow at risk.
Defuse your time bomb now with our Essential Builders Guide to Issuing a Payment Schedule.
Under the Building and Construction Industry Security of Payment Act 1999 (NSW), a builder has a right to respond to a claim for payment from a supplier or subcontractor through a payment schedule. A payment schedule is the builder’s tool that ensures only the agreed works and supplies, meeting the standards, will be paid.
However if a builder fails to issue a compliant payment schedule, they become liable for the whole amount of the claim. And if they don’t issue a payment schedule they can’t file an adjudication response. These are just a few of the implications relating to issuing a payment schedule that does not comply with the SOPA rules.
Tick these Boxes to Ensure SOPA Compliancy when Issuing a Payment Schedule:
[✓] Review Your Contract
Take note of key provisions like the dates when your supplier or subcontractor must submit claims for payment; Also important to note is how many days from the date you receive a claim must you submit a payment schedule. The SOPA requires you send your payment schedule within this time or within ten business days from the date you received a claim for payment, whichever expires earlier.
[✓] Issue Your Payment Schedule on Time
When you receive a claim for payment make sure you write the date, the time, and then count the number of days you have to issue a payment schedule.
[✓] Clarify Who is Liable
Are you the proper respondent of the claim for payment? Are you the person who is or may be liable to pay for the works or the supplies?
[✓] Confirm Dates
Did you receive the claim for payment within the time specified by the contract or within twelve months after the works or supplies were last carried out?
[✓] Check Contract for Issuing Requirements
Did you receive the claim for payment properly? Some construction contracts require claims be sent by email, fax, post or hand. Similarly, did you issue the payment schedule using means outlined by the construction contract? Email? Fax? Post? Hand?
[✓] Review Attachments
Does the claim for payment have all its attachments? For example, does the claim for payment include a subcontractor’s statement?
[✓] Review Your Wording
Does the claim for payment describe the works or supplies being claimed with sufficient details?
[✓] Check Payment Receipts
Ensure the works or supplies being claimed have not previously been claimed or paid for.
We hope this Essential Builders Guide to Issuing a Payment Schedule helps you with your business. Diligence in both your actual work and in your paperwork is how you will get paid.