Do you have a small building or construction project that requires hiring contractors for a small job or ongoing-work? It is important to consider the legislative provisions that regulate how and when you pay these workers. The Building and Construction Industry Security of Payment Act 2009 (Tas) is state based legislation that regulates the payments for work delivered in the building and construction industry.
If you are considering hiring contractors for a construction project, LawPath’s experienced debt recovery lawyers can help you better understand your rights and obligations.
What is the Security of Payments Act (TAS)
In Tasmania, the building and construction industry is regulated by the Building and Construction Industry Security of Payment Act 2009 (Tas) which protects the rights of construction workers to receive progress payments for goods or services delivered. The Act applies to all contracts entered into on or after 17 December 2009 and provides a streamlined adjudication process so that contractors and suppliers can receive or claim progress payments.
Entitlement to payment
Under the Act, contractors are entitled to receive progress payments under any construction contract including contracts that are written, oral or a combination of both. The Act also protects the contractor’s right to payment where the contracts were expressed to be governed by the law of another state or place (other than TAS).
The Act has a broad definition of building and construction work and applies to ‘residential structures’, irrespective of whether the party plans to reside at the residential structure or not.
The Act does not apply to:
- construction contracts that form part of a loan agreement, guarantee or indemnity;
- underground construction work for the drilling or extraction of oil or natural gas; and
- work undertaken or supplies carried out outside of Tasmania.
Interest is payable on the unpaid amount of a progress payment and is calculated at the greater of the following:
- The rate stipulated under the Supreme Court Civil Procedure Act 1932 (Tas); or
- The rate given in the contract.
Payment schedule
If a person does not intend to pay the total amount claimed, a payment schedule must be provided to the claimant within:
- 20 business days (residential building and construction work); or
- 10 business days (all other work).
A payment schedule is a notice in writing that must be served to the claimant to inform them the debtor does not intend to pay the amount claimed. The payment schedule must identify the payment amount being claimed and state reasons as to why the person proposes to pay less than the amount claimed.
Adjudication
The Act has specific provisions for the adjudication of disputes between a claimant and a debtor. A claimant may apply for an adjudication 10 business days after receiving a payment schedule to a nominating authority authorised under the Tasmanian Act to nominate an adjudicator.
If the adjudicator’s decision is in favour of the claimant, the debtor has to pay the adjudicated amount within 5 business days or at a date specified by the adjudicator.
Breach of the Act
The Building and Construction Industry Security of Payment Act 2009 (Tas) protects the rights of contractors and suppliers under a construction contract to receive and recover progress payments for carrying out work and supplying related goods and services.
The adjudicator certificate may be filed by the claimant in Court as it is enforceable as a judgement for debt.
If you have a payment dispute or are looking to hire a contractor, LawPath’s expert debt recovery lawyers can advise you on your rights and obligations.
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