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Progress payments - Amendments to the NSW Home Building Act

As a result of amendments to the NSW Home Building Act, there are now new requirements regarding progress payments for contracts valued at over $20,000 and entered into after 1 March 2015

Progress payment schedule

As a result of changes to the NSW Home Building Act, your residential building contract must include a progress payment schedule containing details of the progress payments payable under the contract. 

All HIA contracts included a progress payment schedule prior to 1 March 2015.

Progress stages

The changes have formalised how progress stages are described and progress claims are made. 

Under a fixed-price contract, a progress payment stage must be described in clear and plain language and: 

  • must be for a specific amount or a specified percentage of the contract price 
  • be only payable after the completion of a specified stage of work, as set out in the progress payment schedule. 

Progress payments can also be claimed on the basis of fixed intervals (as determined by the contract) or on an ‘as invoiced’ basis. If this is the case, payments may be claimed for: 

  • labour and materials in respect of work already performed, or 
  • costs already incurred (which may include the addition of a margin). 

These claims must be supported by invoices, receipts or other documents as may be reasonably necessary to support the claim.

What has changed?

While there were few formal rules on the content of progress payment claims in NSW prior to 1 March 2015, there was a general rule that the amount claimed under each stage should be reflective of the actual value of work completed within that stage. Further, the work described in a progress stage needed to be completed before a claim or invoice was submitted to the client – progress payments could not be claimed in advance of work being done. 

The same approach applies under the new requirements. However, while the new provisions aim to give consumers better information about payment arrangements before the contract is signed, the changes also provide increased certainty as to the permissible structure and content of progress payment stages and claims.

To find out more, contact HIA's Workplace Services team

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