By Geoff Hardy - 3 May 2017
Could payment claims help you in your projects? If you're
a builder seeking payment from a tardy client, the Construction
Contracts Act 2002 has provisions that could help. We set out the
steps below:
1. The builder serves a payment on the client. A payment
claim is a document that states:
- how much the builder believes is owed
- when it is payable
- how the account was calculated
- what work it relates to
- what period it relates to
It must also state that it is issued under the Construction
Contracts Act 2002 and must have a prescribed form attached to it
which explains what the client is to do.
2. The client has 20 working days (unless varied by the
contract) to either pay the claimed amount or serve a payment
schedule on the builder disputing it.
If this is not done, or the payment schedule is invalid, the amount
claimed becomes a due debt. This means the builder can recover the
unpaid amount and costs of recovery awarded against the client in
Court.
The builder can also serve a notice on the client of its intention
to suspend work.
If the payment schedule is valid, the client must pay the
undisputed part of the payment claim by the due date. If the client
fails to pay, the unpaid amount also becomes a due debt and is
recoverable in Court. Failure to pay the scheduled amount also
gives the builder the right to suspend works.
3. If this is not done, or the payment schedule is invalid, the
amount claimed becomes a due debt. This means the builder can
recover the unpaid amount and costs of recovery awarded against the
client in Court.
4. The builder can also serve a notice on the client of its
intention to suspend work.
5. If the payment schedule is valid, the client must pay the
undisputed part of the payment claim by the due date. If the client
fails to pay, the unpaid amount also becomes a due debt and is
recoverable in Court. Failure to pay the scheduled amount also
gives the builder the right to suspend works.
For help with your payment claims, contact Geoff Hardy.