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A payment claim is a method in which a contractor or subcontractor can ensure progress payments  throughout a construction contract. Payment Claims and Payment Schedules are a procedure to expedite the process for obtaining payment of progress payments, as compared with conventional court proceedings.

In all jurisdictions, legislation provides for a statutory right to claim and recover progress payments for work performed or undertaken to be performed under a construction contract. In NSW, the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) applies and specifies strict time frames for the service of a payment claim and payment schedule. In New South Wales a person is entitled to a progress payment on and from a reference date being due date for progress payments. The parties can agree on the reference date, but Section 8 of the Act provides that, if the construction contract does not specify the date, it is the last day of the month in which the work was performed.

The contractor then makes a payment claim for work carried out and materials supplied which must be in accordance with section 13 of SOPA, indicating that it is a claim under SOPA and include specified information such as the construction work, the amount and that it is a claim under SOPA.

The recipient of the payment claim must either pay the amount claimed or respond by a payment schedule indicating the reasons why the proposed payment is less than the amount claimed. Where no payment schedule is issued, the claimant is entitled to recover the amount of the payment claim as a debt due in a court of competent jurisdiction (through adjudication also) and may also suspend work under the contract. Where a payment schedule is issued, the scheduled amount must be paid and the claimant is entitled to recover the amount of the payment claim as a debt due in a court of competent jurisdiction and may also suspend work under the contract.

To speak with an experienced Construction Lawyer, contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au and arrange an appointment. 

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