Residential home building work carried out by a home builder for an owner occupier homeowner has (until very recently as noted below) always been exempt from the security of payment regime in New South Wales.
However, since 1 March 2021 residential builders have been able to resort to the Building and Construction Industry Security of Payment Act 1999 (the SOP Act) with a view to promptly recovering progress payments from home owners.
In this respect, the SOP Act used to prescribe as a class of construction contracts owner occupier construction contracts. The SOP Act did not apply to such contracts. This was the effect of section 7(5) of the SOP Act and clause 4(1) of the Building and Construction Industry Security of Payment Regulation 2020 (the Regulation).
Schedule 2 of the Regulation commenced on 1 March 2021. It omits clause 4.
Accordingly, since 1 March 2021 the security of payment laws have applied to all residential building contracts, including those entered into with the homeowner.
This means that residential home builders carrying out work on an owner occupier's dwelling will now be able to utilise the security of payment adjudication process to resolve a dispute with the homeowner. Since 1 March 2021, residential home builders have also had the benefit of the statutory rights to payment if a homeowner does not provide a payment schedule indicating the reasons why the homeowner is withholding all or part of the builder's progress claim.
For further information please contact:
Sean Greenwood, Senior Associate
Phone: +61 2 9777 8315
Email: stg@swaab.com.au
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