Progress Payments:

The Building and Construction Industry Security of Payment Act 1999 (“SOPA”) and other state equivalent legislation, gives a right to progress payments to a person who has carried out construction work or provided related goods and services and also provides a relatively fast and efficient process for obtaining payment.

SOPA gives a contractor or subcontractor a right to progress payments and enables a contractor or subcontractor to initiate a fast track process for obtaining payment of progress payments, as compared with conventional Court proceedings.

The time and cost involved in most building projects are such that it is normal for the contract to issue provisions for payment of the agreed price by instalments. Even where no such express provision is made, it may be implied. Progress payments are usually made upon presentation of a progress certificate by the superintendent. It may be possible to claim a set off against a progress payment, for example, for damages for delay.

In issuing a progress certificate the superintendent is required to determine the value of the work performed, as this valuation forms the basis of the certificate. Although the valuation should include an allowance for defective work, the fact that no allowance is made does not constitute an acceptance of work and materials previously provided. Similarly, since a progress payment is merely an interim payment on account of the contract sum, the making of a payment in response to a progress certificate does not preclude the proprietor from later disputing the valuation on which the certificate is based.

A progress certificate, to be valid, must comply substantially with the requirements of the contract. A contract will normally require the proprietor to pay to the contractor the sum certified as payable in the progress certificate. The obligation to pay is then enforceable by action, notwithstanding that the work is not complete. Whether the proprietor is entitled to deduct from the sum certified, any amount of money due from the contractor will depend upon the terms of the contract.

A contractor, following a progress payment becoming due, also has a lien over unfixed plant and materials supplied by him, without prejudice to third-party rights or rights of parties holding a prior charge or lien.

If you require assistance with a progress payment related matter, please make an appointment to see one of our Building and Construction Solicitor by contacting our firm on (02) 9233 4048 or sending an email to info@navado.com.au.

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.