Building and Construction Law Basics – Part 1 – Payment Claims
Security of payment in Queensland is regulated by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA). BIFA came into force in December 2018, repealing the Building and Construction Industry Payments Act 2004 (Qld) also known as BCIPA. BIFA aims to facilitate payments for building and construction industry participants who have performed construction work or supplied related goods and services. Here’s a breakdown on how to get paid under BIFA.
The first step in the payment process is for the individual or company who performed construction work or supplied related goods or services (“the claimant”) to submit a payment claim to an individual or company who is responsible to make the payment (“the respondent”). A payment claim must meet specific requirements to be valid otherwise your adjudication application will be rejected. A payment claim must:
- be in writing – it can either be a hard copy or electronic copy;
- only claim for construction work orrelated goods and services that has been carried out or supplied up to the relevant reference date (see part 3 of Building and Construction Law Basics for more on reference dates);
- be the only payment claim served for the reference date. Subsequent payment claims served for the same reference date are void;
- identify the construction work or related goods and services the claim relates to. This means providing details so that the amount claimed can be understood, measured and valued. Attaching supporting documents like variation claims and approvals, time sheets and supplier invoices is helpful;
- state the amount claimed – it may also include an amount that was included in a previous payment claim. It is also a tax invoice so make sure GST is identified;
- request payment of the claimed amount – a written document with the word ‘invoice’ is sufficient;
- be addressed to the respondent. Inclusion of the respondent’s ABN to identify the correct party under the contract responsible for payment (e.g. a natural person, company, partnership, incorporated association or trustee of a trust) is helpful.
The second step is to determine when to give a payment claim. A payment claim must be given for completed work or goods and services starting from each reference date under the contract. If the contract does not stipulate reference dates BIFA provides default reference dates. A payment claim must:
- be served on the respondent in accordance with the contract; and
- be served within the time limitations stated in BIFA. In most cases the claim must be given before the end of whichever of the following periods is the longest:.
- the period worked out under the construction contract;
- 6 months after the construction work to which the claim relates was last carried out or the related goods and services to which the claim relates were last supplied.
However, be aware that different timeframes may apply to a final payment claim.
There is more to come in our Building and Construction Basics series, so stay tuned.
With more than 15 years’ experience in the building and construction industry and as a commercial litigator with a focus on contractual disputes, debt recovery, building and construction for the last 10 years, our principal solicitor Sam Cohen brings a wealth of knowledge and experience in a complex area of law. If you would like to find out more on how the payment process works or any other matters relating to building and construction, please contact us today.