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Frequently asked questions - Overview

Why was the Building & Construction Industry Security of Payments Act introduced?

  • Over several years the Building and Construction Industry has actively campaigned for new payment legislation for their industry.

Is there similar legislation in existence elsewhere in Australia?

  • Most Australian States and Territories have payment legislation in place.

What are the objectives of the Act?

  • To ensure that a person is entitled to receive and recover progress payments for the carrying out of building or construction work or supplies related goods and services under a construction contract in Tasmania.
  • To provide a quicker and cost effective resolution of payment disputes than the court system.

How are these objectives achieved?

  • The Act creates a statutory right for persons (the Claimant) to receive progress payments. The Claimant may recover payments in four steps
  1. Lodge a payment claim with the Respondent (the person who is considered by the claimant to owe money)
  2. The Respondent is then entitled to provide the Claimant with a 'payment schedule'
  3. If there is a dispute over the claim, or the claim is not paid in full, the matter may be referred to a Nominating Authority who will appoint an adjudicator to make a decision
  4. An adjudicator will determine the amount owed.

What does the Act apply to?

  • With some exemptions, the Act applies to all building or construction contracts where a person:
    • Carries out building or construction work; or
    • Supplies related goods or services, in Tasmania.
  • Contracts include ORAL contracts.
  • The types of contractual arrangements captured by the Act include:
    • Builders and other contractors against residential owners
    • Subcontractors against Owner builders
    • Contractors against principals/developers
    • Subcontractors against contractors
    • Suppliers against subcontractors/contractors
    • Plant and equipment hirers against subcontractors/contractors
    • Consultants against clients.

When can a Claimant proceed to adjudication?

  • A Claimant may lodge an adjudication application where either:
    • The payment schedule is less than the payment claim; or
    • No payment schedule is issued within the prescribed time; or
    • The schedule amount is not paid, or only partly paid by the 'due date' for payment.

How does the adjudication process work?

  • The Claimant lodges an Adjudication Application with a Nominating Authority (NA).
  • The Adjudication Application must be made within either:
    • 10 business days of receiving a payment schedule, where the payment schedule amount is less than the payment claim amount if the respondent is a building practitioner; or
    • 20 business days of receiving a payment schedule, where the payment schedule amount is less than the payment claim amount if the respondent is a residential owner; or
    • 20 business days after the due date for payment, where the Respondent fails to pay the whole or any part of the scheduled amount, or
    • 15 business days of the Claimant serving a notice* on the Respondent, where the Respondent has:
      • NOT SERVED A PAYMENT SCHEDULE within the prescribed time; and
      • NOT PAID WHOLE OR ANY PART of the claimed amount by the due date for payment.
  • * This 'NOTICE of Intention to Apply for Adjudication must be made within 20 business days immediately following 'due date' for payment.

Who authorises Nominating Authorities?

  • The Act establishes a Security of Payments Official who has authorised a number of Nominating Authorities (NA).
  • Comprehensive registration criteria is met in order to become authorised.
  • Conditions of authorisation apply to NA's to maintain authorisation status. These conditions include requirements to nominate adjudicators who possess appropriate qualifications and experience to adjudicate each application.
  • A breach of a condition may result in a NA having their authorisation suspended or cancelled.

Who selects the adjudicator?

Nominating Authorities (NAs) select adjudicators.

Who selects the NA?

The claimant chooses which NA to submit an adjudication application to.

Claimants should be aware that fees amongst different NAs may vary. Also, each NA will have different panels of adjudicators. Prior to selecting an NA, a claimant should inquire about NA fees and the likely fees and expenses of the adjudicator. Claimants are encouraged to discuss with the NA, the nature of the issues involved in their claim and the qualifications that might be required of the adjudicator.

Who do I speak to if I am not sure how to lodge an application for adjudication?

This is the role of the Nominating Authority, select one from the list available at Nominating Authorities and Adjudicators