Understanding Progress Claims and Progress Payments

As a homeowner, it is important to understand the concept of progress claims and progress payments under the NSW HIA Lump Sum Contract. A progress claim is a request for payment made by the builder to the homeowner for the work completed on the project up to a particular date. It is important to note that a progress claim is not the same as a progress payment. A progress payment is the amount the homeowner is required to pay to the builder in response to the progress claim. The NSW HIA Lump Sum Contract sets out the rules for progress payments, including the requirement for a payment schedule to be provided by the homeowner in response to a progress claim. It is essential to understand these rules and to seek professional advice if you are unsure of your rights and obligations.

Importance of Accurate Progress Claims

Ensuring that progress claims under the NSW HIA Lump Sum contract are accurate is crucial for both builders and homeowners. Builders need to ensure their progress claims are accurate to avoid disputes with homeowners and potential legal action. Homeowners, on the other hand, need to ensure that they are paying for work that has been completed and is in accordance with the contract. If a builder submits an inaccurate progress claim, it can lead to delays, disputes, and potentially non-payment. Additionally, an inaccurate progress claim can lead to the withholding of payment, which can cause financial hardship for the builder. As such, it is important for both parties to carefully review progress claims and ensure their accuracy before submitting or making payment.

Calculating Progress Payments under the NSW HIA Lump Sum Contract

Calculating progress payments under the NSW HIA Lump Sum Contract can be a complex process. Progress payments are typically based on the value of the work completed to date. The NSW HIA Lump Sum Contract includes a clause outlining the progress payment schedule, which specifies the percentage of the total contract price that is to be paid for each stage of construction. The builder is required to submit a progress claim that reflects the work completed to date, and the progress payment is calculated based on that claim. The homeowner should review the progress claim carefully to ensure that it accurately reflects the work completed and that the payment is calculated correctly. It is important to seek legal advice if there are any concerns about the accuracy of the progress claim or payment.

HIA Lump Sum Contract Clause 17 | Contracts Specialist

Ensuring Compliance with the Security of Payment Act NSW

Builders and homeowners must ensure compliance with the Security of Payment Act NSW when making or receiving progress claims. Failure to do so can result in payment disputes and legal action. Under the Act, progress claims must be served correctly and on time, and payment schedules must be provided if requested. Adhering to the Act can help to prevent payment disputes and ensure that progress payments are made promptly and accurately. It is crucial for both builders and homeowners to understand their rights and obligations under the Act and seek legal advice if they have any concerns.

Final Progress Claims

The final progress claim is the last payment that the builder can claim under the NSW HIA Lump Sum Contract. This claim is made when the project is completed or at practical completion. It is essential to ensure that the final progress claim accurately reflects the work completed and the agreed-upon price.

Homeowners should verify that the work has been completed according to the contract and check that the claimed amount is correct. If there are any defects or incomplete work, it is essential to notify the builder as soon as possible.

It is also essential to ensure that the final progress claim is compliant with the Security of Payment Act NSW. The Act requires that the payment claim must be served within 12 months after the work is completed, and any payment disputes must be resolved within a specific time frame.

In conclusion, homeowners must ensure that the final progress claim is accurate, complies with the contract and the Security of Payment Act NSW, and reflects the work completed. Any disputes must be resolved promptly to avoid costly and time-consuming legal action.

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In conclusion, accurate progress claims are essential for the success of any construction project, and compliance with the NSW Security of Payment Act is crucial to ensure the prompt and fair payment for all parties involved. Homeowners and builders must understand their contractual and legal rights, obligations, and risks related to progress payments and progress claims under the NSW HIA Lump Sum Contract. It is advisable to seek professional legal advice to ensure compliance with the Security of Payment Act and to avoid any disputes that may arise from inaccurate or non-compliant progress claims. 

As a solicitor and construction lawyer with more than 10 years of experience, I can provide legal advice to homeowners and builders regarding progress payments and progress claims. My legal expertise can assist in negotiating and amending contracts to reflect their intentions and protect their interests. Don’t hesitate to contact me for professional legal advice and ensure the success of your construction project.ations, and do not let any progress claim jeopardise the completion of your dream home