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In South Australia, the Building and Construction Industry Security of Payment Act 2009 (the Act) covers those carrying out construction work under a construction contract.
The Act puts in place various payment protection measures including:
Contracts for domestic building work between a resident (or future resident) and a builder or tradesperson are not covered by the Act.
To be covered by the Act, the contract must be for construction work or the supply of related goods and services, including:
The contract may be written, or oral, or a combination of the two.
If a contract is covered by the Act, it is not possible to include a provision that alters or restricts the effect of the Act. This means the Act will apply, regardless of what the parties intend or include in the contract terms.
A payment claim must:
The value of the claim is calculated either:
Construction work is valued with regard to:
A claim may also include retention monies due for release.
A payment claim must be issued within the later of either:
A payment claim must be paid by:
If a payment claim is overdue, it may be subject to interest. The claimant also has the right to exercise a lien over unfixed plant or materials.
The recipient of a payment claim made under the Act (the respondent) may respond to the claim by providing a payment schedule to the builder. A payment schedule must identify:
The payment schedule should be issued by the earlier of either:
The undisputed amounts of a payment claim must be paid by the due date.
If a respondent has not provided a payment schedule it will not be permitted to respond to an adjudication application.
The claimant may apply for adjudication if:
They also have the option to suspend the works by written notice, in accordance with the procedure set out in the Act.
As an alternative to adjudication, the claimant can recover the unpaid amount in court.
HIA has further information on the adjudication process.
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