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Guide to getting paid
At times, building contractors in Queensland have difficulty getting paid, particularly by homeowners. Owners may withhold the final payment or attempt to “negotiate” the final payment based on minor defects. This puts undue pressure on building contractors.
Wednesday, 15th November 2023
To assist with getting paid, we recommend the following:
- Ensure you notify the owner in writing that practical completion has been reached as per the contract requirements;
- Do a final walkthrough with the owner. At this walkthrough, listen to the owner and their complaints (if any) regarding alleged defects. If the owner has concerns, try to address them then and there, then develop the defects document required for practical completion. Do not be afraid to discuss payment and be upfront with your expectations for payment;
- Advise the owners that, in accordance with the HIA contract, you will not be providing them with the keys to the property until you are paid in full. Ensure the site is secure during this period;
- Remind the owner that there is a statutory 12 month defect liability period. If the owner is genuinely concerned as to whether an item is defective, they always have the option of involving the QBCC;
- If payment is more than five days late, we would suggest you send a first letter of demand. Follow this letter up with a phone call. If necessary, offer to have another onsite meeting to go through any issues; and
- If the owner still refuses to pay, the builder has the option of commencing proceedings with the QBCC Early Dispute Resolution (EDR) process, and thereafter if needed the Queensland Civil and Administrative Tribunal (QCAT). This is obviously the last resort but it is the only forum that building contractors can really commence proceedings in.
The single best tip in getting paid is to ensure that your contract administration is carried out properly from the commencement of the contract.
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