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Many building contracts have an agreed price for the whole of the work with payments made when the house reaches certain stages – slab, plate height, lock-up – and so on.  Usually the builder makes a progress claim which needs to be settled within a specified time period or else penalties and interest can apply for late payment.

When there is a dispute over a progress claim the contract may state the process for dispute resolution.  One relatively unknown process is a process of rapid adjudication under the Construction Contracts Act.  This process has been introduced only in recent years to provide greater security of payment in the building industry.

Under this legislation, either the builder or homebuyer can submit a payment dispute to an independent adjudicator.  The adjudicator assesses the claim and gives a binding determination of who should pay, and how much.

This adjudication process is designed to get a rapid resolution of payment issues.  The Act sets strict time limits to allow decisions to be made quickly with payments not held up by lengthy disputes.

For example, an application for adjudication must be lodged within 28 days of the payment dispute arising.  In addition when a claimant lodges a dispute, the respondent has 14 days to respond.  The adjudicator is then required to make a decision within a further 14 days.

It is important that all parties to a building contract have a suitable security of payment mechanism providing rapid adjudication of payment disputes.

For further information of the Construction Contracts Act look at the website of the Department of Housing and Works www.dhw.wa.gov.au.

3 responses to “Progress Payments and Disputes”

  1. Sharon says:
    January 18, 2014 at 12:57 pm

    Just a question. We are building in Bunbury through a project builder. Things have been progressing smoothly and we have made our regular progress payments as each stage is completed. However, our builder asked for the tiling and fit out progress payment in mid December when the tilers had only just started and only part of the cabinetry had been fitted. Then came the Christmas break and nothing was done on the house for 2/3 weeks, meanwhile we have been paying interest/morgate plus rent. It’s now heading towards the end of January, the tiling still hasn’t been finished nor has the cabinetry and we are still paying the higher interest. Where do we stand on this issue. Kind regards Sharon

  2. Bob Petchell says:
    December 10, 2015 at 9:10 pm

    Can you please advise what work should be completed for payment at lockup stage of construction for a brick and tile residence.