Need to know how Security of Payments applies to home building work?
For a contractor, if you use Security of Payments software or have access to legal advice, you’re in a powerful position to ensure you get paid.
For a builder however, it’s really quite alarming.
Here is the low down.
As a building and construction lawyer, one of my big bug-bears is seeing people in industry getting ripped off. It’s astonishing how frequently this occurs.
Did you know your industry makes up over 20% of all insolvencies in Australia? Want to hear something else surprising? It’s often builders who are the non-payers and ripping contractors off.
But times are changing with circumstances like this.The smaller home builder can now thank their commercial builder comrades for the sword the Australian Government has given contractors to use against dodgy builders.
Unfortunately though, even if you are an honest, compliant home builder, when it comes to the Security of Payments Act, you do get a raw deal. There are no rights under the Security of Payments law you can lean on against dodgy ‘mum and dad’ clients. Unlike your contractors who do have the benefit of the Security of Payments law to use against you.
This is why it is so important for builders to understand how to write and make a payment claim, and understand the difference between progress claims, schedules and tax Invoices because failing to comply with Security of Payments could see a builder owing their contractor the complete payment claim.
We recently wrote on about 5 common pitfalls with Australian Standard Contracts for Small Builders and on understanding the difference between progress claims, schedules and tax Invoices. If you are in the building and construction industry for the long term, please take the time to read these.

Also, consider ditching paper contracts.

Paper contracts aren’t going to tell you when there is a mistake. Not until it’s too late anyway and it’s costing you a fortune in legal fees. Try out a construction compliant software where contracts are created using an automated system that speaks with all the other project admin to ensure the build, including all its contractual obligations, is compliant. Small Builders software it is all backed by a building and construction lawyer (that’s me) so you can be assured compliance throughout the life cycle of the project – because I guarantee it.