Builders receive support from NSW over clients who don’t pay

Builders receive support from NSW over clients who don’t pay

In recent weeks happy news was delivered to for builders in NSW, already buoyed by the HomeBuilder and stimulus-driven wave of detached house construction they have now seen a big change in the state’s security payment act ruled in favour of builders against clients who refuse to pay.

The 20-year-old act revision took place this week giving builders and other trade people the right to take individual owners to legally binding adjudication over unpaid bills, ending the need for them to take clients to court or the NSW Civil and Administrative Tribunal. This new adjudication mechanism is designed to take no more than six weeks from the claim for payment to decision. It removes the scope for homeowners to:

1. Withhold payment,

2. Claim defective work, and

3. Refuse access to the completed property for inspection or remediation.

The director of consultancy Contractors Debt Recovery, Anthony Igra, said that Owners are always part of the payment chain but they have the least amount of accountability. “Security of Payments is simply a dispute resolution process. If the owner wants to say ‘I’m not going to pay because the work is defective, it’s the opportunity for them to put up or shut up.”

According to Robert De Marcellis, the director of Foresight Constructions, a commercial and residential builder based in western Sydney’s Padstow, “To stay in business you need money.” “That’s the nature of the beast. If the builders [have] followed the right protocol and done the right thing or the tradies [have] done everything and done it properly, people have to pay up.”

The timing of the new rules, which were decided last year when regulations around the act were changed, is coincidental but will benefit builders and tradespeople servicing the boom of new houses triggered by pandemic stimulus measures.

Between June, when the federal government’s HomeBuilder payments were announced, and January, when NSW authorities approved 18,122 new detached dwellings, there was a 13 per cent increase on the same period a year earlier. “I don’t think people appreciate the effect it will have.”

“There will be a long period of adjustment for homeowners, particularly high-end homeowners who realise they can’t rip their builders off any more and will find themselves subjected to proceedings.”


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