Payment terms in the construction industry (NSW)

Construction

We have seen an increase in complaints from our client’s about the payment terms they are subjected to in the construction industry. In most circumstances, these excessive payment terms are actually void pursuant to the Building and Construction Industry Security of Payment Act 1999 (the Act).

Pursuant to the Act, progress payments become due and payable as follows:

  1. If you are a head contractor and making a claim on a principal:

a. 15 business days after making a claim; or

b. An earlier date in accordance with the terms of the contract.

    2. If you are a subcontractor making a claim:

a. 30 business days after making a claim; or

b. An earlier date in accordance with the terms of the contract.

    3. If you are a contractor performing works for a residential builder who is carrying out works for a person who resides in or proposes to reside in the premises:

a. The date in accordance with the terms of the contract; or

b. If the contract makes no express provision, 10 business days after making a claim.

If you find yourself faced with excessive payment terms, it is in your interests to utilise the processes set out in the Act. If you need assistance with making a valid payment claim under the Act give one of our experienced construction lawyers a call.

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