Debt Collection for Builders and Contractors:

Debt collection issues arise frequently in building and construction industry cases. This is obviously due to the fact that the construction of a project, whether it is for a residential or commercial building, is a staged process, and various issues may arise between or within each stage to the quality of the work. The funding of a construction project is usually affected through a system of progress payments, where the owner or client provides staged payment for the completion of the building.

Each construction phase will likely have an associated estimate of costs as well as a timeframe for completion. The payment of each stage of the project may be contingent on the satisfactory discharge of the builder’s duties onsite. Periodic inspections may therefore be essential to ascertain whether or not there is a right to demand payment or whether an owner or client has a legitimate concern over the progress of the building’s construction (thus giving it a right to defer or suspend payments).

Whether or not one is the builder, or the prospective owner of the final built structure, a claim may arise to the liability, to pay for the work completed. There are various instances where such a claim can arise as a debt owed to a party:

(a) A builder may claim that he has completed work that has not been paid for by the client;

(b) A client may have found the builders work so unsatisfactory that he may have directly retained independent contractors to complete part of the work, and claimed this amount as an offset against the builder’s claimed debt, or debt in its own right; or

(c) A contractor may have been retained by the builder to complete some aspect of the building project and not been paid for work done.

These are cases where debts may be claimed against the alleged debtor party. The adjudication process provides a system through which debts can be rapidly assessed and determined so that the progress of construction can be finalised. There are rules and timeframes through which the adjudication process is to be managed. The drafting and service of payment claims and payment schedules by litigants is to be done in accordance with the statutory requirements. Legal advice from an adjudication solicitor should be obtained as a matter of urgency if a party has found himself potentially subject to the adjudication due to the fact that non-response can give rise to significant liabilities. An Adjudication Lawyer working in the building and construction industry will be able to deal with the process through which the dispute is dealt with.

Of course, there will be situations where the adjudication process may not be the appropriate method through which you may resolve a building and construction debt claim. Likewise, there may be instances where the adjudicator’s determination may be subject to review. In these cases, general debt collection procedures may be the appropriate path through which a litigant may seek to have his rights secured. These processes will require detailed and diligent attention by a Debt Collection Solicitor who will assist in the provision of legal advice and the preparation of the Statement of Claim or Summons, as well as the preparation of all relevant evidence. Issues relating to off-sets and counter claims will also need to be considered where the debt collection lawyer acting for a defendant. The importance to obtaining professional legal assistance in the area of Construction Law would be valuable.

If you require assistance with a debt collection matter, you may wish to contact our firm by telephone on (02) 9233 4048 or send us an email to info@navado.com.au and make an appointment to see one of our solicitors. 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.