LAWMATTERS RMB -AWYERS LAW CHANGES FOR HOME BUILDING CONTRACT DISPUTES Progress payments for residential building work can be a source of protracted dispute between homeowners and builders. AMB Business and Commercial Transactions Lawyer BEN KUZMAN explains changes to the law: Recent changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) have changed how residential home builders can obtain payment for work from homeowners The SOP Act seeks to ensure that parties to contracts for construction work or the supply of related goods or services, are entitled to promptly receive progress and final payments. The procedure for recovering progress payments involves builders issuing payment claims, and homeowners issuing responses to these requests for payments called payment schedules The SOP Act has been expanded to apply to 'owner occupier construction contracts residential construction contracts for building work on any part of a premises where the person for whom the work is performed resides or proposes to reside. Previously, the SOP Act had not applied in the residential building context. This change means builders now have a new way to obtain timely payment from homeowners. Critically, where a homeowner disputes a builder's progress claim, the builder can seek an independent adjudication of its payment claim if the builder is successful in the adjudication, the builder can then obtain an adjudication determination for the amount of the progress claim which is enforceable against the homeowner. Typically, this determination is made within 21 days of lodging the adjudication application Where a homeowner does not provide a payment schedule to a builder which sets out any reasons why a progress claim is disputed or payment is being withheld, a builder obtains a statutory right to payment which can be enforced against a homeowner upon demonstrating the work was performed under a valid construction contract between the parties. For builders, pursuing payments under the Act presents a significantly quicker and less costly means of resolving progress payment disputes than dealing with disputes in court. For homeowners engaged in a payment dispute with their builder, there are serious consequences for not complying with the procedures and requirements of responding to a payment claim made by a builder. These include the builder becoming entitled to receive a payment which the homeowner may otherwise dispute. Moving forward, use of the SOP Act will be increasingly common in residential building It is therefore important that both builders and homeowners understand how to navigate this complex legislation when payment disputes arise. Always where you are Business Low Dispute Resolution Conveyancing & Property Law Wills and Estates Compensation Low Criminal Law Relationships Low CILANT ORGHOGE & Family & BOWRAL 387 Bong Bong St MOSS VALE 300 Argyle St 4862 1411 www.rmblawyers.com.au LAWMATTERS RMB -AWYERS LAW CHANGES FOR HOME BUILDING CONTRACT DISPUTES Progress payments for residential building work can be a source of protracted dispute between homeowners and builders . AMB Business and Commercial Transactions Lawyer BEN KUZMAN explains changes to the law : Recent changes to the Building and Construction Industry Security of Payment Act 1999 ( NSW ) ( SOP Act ) have changed how residential home builders can obtain payment for work from homeowners The SOP Act seeks to ensure that parties to contracts for construction work or the supply of related goods or services , are entitled to promptly receive progress and final payments . The procedure for recovering progress payments involves builders issuing payment claims , and homeowners issuing responses to these requests for payments called payment schedules The SOP Act has been expanded to apply to ' owner occupier construction contracts residential construction contracts for building work on any part of a premises where the person for whom the work is performed resides or proposes to reside . Previously , the SOP Act had not applied in the residential building context . This change means builders now have a new way to obtain timely payment from homeowners . Critically , where a homeowner disputes a builder's progress claim , the builder can seek an independent adjudication of its payment claim if the builder is successful in the adjudication , the builder can then obtain an adjudication determination for the amount of the progress claim which is enforceable against the homeowner . Typically , this determination is made within 21 days of lodging the adjudication application Where a homeowner does not provide a payment schedule to a builder which sets out any reasons why a progress claim is disputed or payment is being withheld , a builder obtains a statutory right to payment which can be enforced against a homeowner upon demonstrating the work was performed under a valid construction contract between the parties . For builders , pursuing payments under the Act presents a significantly quicker and less costly means of resolving progress payment disputes than dealing with disputes in court . For homeowners engaged in a payment dispute with their builder , there are serious consequences for not complying with the procedures and requirements of responding to a payment claim made by a builder . These include the builder becoming entitled to receive a payment which the homeowner may otherwise dispute . Moving forward , use of the SOP Act will be increasingly common in residential building It is therefore important that both builders and homeowners understand how to navigate this complex legislation when payment disputes arise . Always where you are Business Low Dispute Resolution Conveyancing & Property Law Wills and Estates Compensation Low Criminal Law Relationships Low CILANT ORGHOGE & Family & BOWRAL 387 Bong Bong St MOSS VALE 300 Argyle St 4862 1411 www.rmblawyers.com.au