Final payment for new build in NSW

savg · Oct 02, 2023 11:34 pm

My builder is aggressively pressuring us to make the final payment as he says he has reached 'practical completion'. However, a few major concerns from our end:

- The progress payment schedule indicates payment is due at 'Final Handover' rather than at PC
- The builder won't let us view any certificates he has obtained to date (he's a first time builder and I'm worried he has missed critical certificates required for OC)
- The builder says he won't provide the OC or handover anything until 4 to 8 weeks AFTER final payment. He says he needs the time as he has retention on his subcontractors and needs our payment before they release certificates. He's clearly having cashflow issues

We've reiterated to the builder that final payment will be made on handover, as per the contract, but he had threatened us with the Security of Payments process...which I understand is favourable to builders. He will attempt to use SOPA to circumvent the contract, knowing it'll take longer for me to get a court hearing. Our bank is financing (they want to view a partial OC), but the builder has indicated he doesn't care and wants to go ahead with SOPA.

I'm worried he owes his subcontractors a lot more than our final payment and will take his sweet time after our payment to obtain our OC, or just outright disappear.

Thoughts on how to proceed?

ponzutwo · Oct 03, 2023 6:33 am

Get a lawyer. If he's got no money (which I suspect is the case and why he's pursuing agressively), he's likley to be scared into sorting the OC out and following the relevant contract schedules.

However I'm pretty sure that the SOPA doesn't mean they can circumvent the contract. The SOPA process accounts for when the contract does not specify when the person perfor.ing the work is entitled to be paid. If that happens the SOP Act sets the date.

If you're under a standard building contract and the schedule is clear, as it says, at handover, then the builder doesn't appear to have a leg to stand on and may be trying to bluff you.

Don't be bullied.

building-expert · Oct 03, 2023 9:32 am

In Victoria builder must not demand final payment unless OC is given to the owner. Check your NSW legislation it is likely to be the same.

savg · Oct 03, 2023 9:52 am

Unfortunately that's not the case in NSW, which is absolutely terrible for consumer protection

ponzutwo · Oct 03, 2023 12:22 pm

savg

Unfortunately that's not the case in NSW, which is absolutely terrible for consumer protection

regardless, your contract stipulates a payments schedule and SOPA doesn't give provision to that scenario. Your contractual terms appear to stand. Hence get a lawyer, it may be as simple and an hour and the price of a letter being drafted to get the builder off their behind.