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Posted 23 September 2024
Category: Strata, Building Defects
Finally there is some good news for owners corporations defending payment claims by unlicenced or uninsured contractors, or contractors without the appropriate licence, under the Building and Construction Industry Security of Payment Act 1999 (SOP Act) for residential building work carried out on the common property of the scheme.
On 20 August 2024 the latest amendments to the SOP Act took effect, which include the addition of sub-section 2 to section 8 of the SOP Act as follows:
8Ā Ā Right to progress payments
Section 4 of the Home Building Act 1989 (HBA) provides that a contactor must hold an appropriate contractor licence to carry out any residential building work or any specialist work.
Section 92 of the HBA requires that the contractor must be under a contract of insurance required under the HBA and provide a copy of a certificate of insurance to the owners corporation.
Before 20 August 2024, in defending payment claims made by unlicenced or uninsured contractors, the owners corporation may, in preparing its payment schedule in response to the payment claim, rely on:
To prepare the payment schedule, the owners corporation may experience difficulties to
From 20 August 2024, pursuant to the amendments to the SOP Act mentioned above, the owners corporation may simply rely on section 8 of the SOP Act as a complete defence against payment claims made by unlicenced or uninsured contractors, or contractors without the Ā appropriate licence.
However, there are still areas not clear in relation to the amendments. For example, where the contractor obtained the insurance required at a later stage of the building contract, the question remains whether the contractor is entitled to progress payment for works carried out before obtaining the insurance.
At Bannermans Lawyers, we assist the owners corporation by way of:
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