A payment claim is a process of obtaining payment for work performed or services supplied under a construction contract. This article guides on:
- who can make a payment claim;
- how to make a payment claim; and
- serving the payment claim,
in accordance with the Building & Construction Industry Security of Payment Act (Vic) 2002.
Can I make a Payment Claim?
Those who can make a payment claim include:
- contractors for clients;
- subcontractors to contractors;
- suppliers of building components for purchasers;
- consultants for clients; and
- hirers for clients,
who are involved in construction work or related goods and services including:
- building work;
- civil engineering;
- plant or equipment hire;
- professional consultant services; and
- supply of building materials.
Creating the Payment Claim?
There are requirements the payment claim must meet to be valid:
The payment claim needs to be endorsed:
“This is a payment claim made under the Building & Construction Industry Security of Payment Act (Vic) 2002”.
If the final payment claim, this endorsement will need to be amended to such effect.
- Entity details
Both you and the other party of the payment claim must have inclusive trading names and ABN / ACN numbers included.
- Project details
The project name or a project description and project site address are to be included.
- Describe work or services
The work or services should be itemised and correctly identified. Variations and scope works included. Latent conditions, time related costs and contract breaches excluded.
- Total Amount
Total payment claim amount is identified. This may be a contract sum or otherwise you will need to show how you calculated the amount.
- Supporting Evidence
You may include evidence such as statements, completion certificates, delivery dockets, photographs and other contract documentation.
Serving the Claim
Service is to be on or after agreed reference date for the preceding month’s work as per contract, or if none agreed, the last day of month. One claim per reference date only. In any case, a claim must be within 3 months of last carrying out construction work or supply of services for the project to avoid adjudication barring.
A payment claim may be on party served by:
- personal delivery;
- lodgement during business hours at ordinary place of business;
- post or facsimile addressed to ordinary place of business;
- email (if history of usage and agreed method of service); or
- in another manner prescribed by contract.
When do I get paid?
After serving payment claim, the other party pays per:
- the date in contract; or
- if no valid contract provision, 10 business days after payment claim served.
The party may respond to your payment claim with a payment schedule within 10 business days, as a part of a separate adjudication process.
There are strict requirements for payment claims for who can supply, how to create and service.
It is recommended you seek legal advice prior to commencing your payment claim process to ensure validity and avoid adjudication barring, payment complications and unnecessary costs.