Browse Forums Building A New House 1 Jul 22, 2011 10:31 pm Once again our builder has sent us an invoice to pay for the latest stage well before it has been completed. With the current rain we are having, along with the work still to be done, I see it will be a few weeks until the stage is complete. Each time an invoice comes and the stage is not finished, I say I'm not paying. First time around, they were ok with it, second stage, they started getting heavy after I held off for over a week and said I can't withhold payment for whatever reason. This time around they just told me to pay. Do I have any legal right to not pay a stage claim until it is complete? Or does the builder have the right to issue an invoice whenever they see fit and slap interest on the bill if I don't pay immediately? Seems that if the latter occurs, they may as well just ask for progress payments at regular intervals through the build period regardless of the work done. Has anyone else regularly been sent progress payments before a stage is complete and did you pay or ask for extra time until it was completed? Land at Chermside At tender stage Re: Delaying payment of stage invoice until work finished? 3Jul 23, 2011 9:44 am If you have an HIA contract then you must pay all progress payment when requested. The only payment you can withhold is the very last one (PCI) on the condition that you provide in writing a list of item that must be done to reach PCI. The builder may disagree and take it to dispute resolution. Check your contract. It defines the rules of payments. DKP Re: Delaying payment of stage invoice until work finished? 4Jul 23, 2011 12:10 pm I'm not a lawyer, but I consulted a building lawyer before signing the contract. My lawyer says don't pay the demanded progress payment if the stage is not complete.
This is what my HIA New Homes Contract January 2008 says: - 'Progress Payment' means a payment that the Builder may claim on the completion of a construction stage as detailed in Schedule 3. - 'Completion' means that the Building Works to be carried out under the contract have been completed in accordance with the Plans and Specifications set out in the Contract. - Clause 29.0 The Builder must give the Owner a written claim for each Progress Payment when each stage has been completed, as set out in Schedule 3. - Clause 30.0 The Owner must pay the amount of a Progress Payment set out in Schedule 3 within the number of Days set out in Item 7 of Schedule 1 after both:
This is what Consumer Affairs says: Before you make each progress payment, check the work:
Do not make payments in advance. Domestic building insurance may not pay claims on work paid for in advance. http://www.consumer.vic.gov.au/CA256EB5 ... ~#payments Here's are two good discussions on when to pay for progress payment: viewtopic.php?f=31&t=49234 viewtopic.php?f=31&t=42405 Delaying payment of stage invoice until work finished? 5Jul 23, 2011 12:31 pm The other thing to consider is that when you submit your progress payment request to the bank, our paperwork said that by signing it we were confirming that the work had been completed... What would happen if you sent the payment request through to have the bank come back and say "no it's actually not finished and we're not going to pay until it is" Re: Delaying payment of stage invoice until work finished? 6Jul 23, 2011 5:29 pm Thanks very much for your replies. And to zeitgeber, thanks heaps, that helps so much. There is a comment on the contract, written on the progress payment page stating "the customer must not withhold payment for whatever reason". I would like to think that this does not override the terms and conditions of the standard HIA contract. As for our lender, our progress payment forms just have us agree to payment, there being no mention of the work being complete. I called them to ask about whether they release payment if a stage isn't complete and they said they don't care for progress claims, it's only at the last payment that they can withhold if the house isn't completed in full. Land at Chermside At tender stage Re: Delaying payment of stage invoice until work finished? 7Jul 23, 2011 5:36 pm If it is a stage claim - e.g.: slab down, plate height, roof cover, lock up etc then the builder can ONLY legally bill you once a stage is complete. Therefore if they invoice you for roof cover and you have no roof - don't pay it. Every building contract in Australia must come under the head HIA contract. And in there it states what I have just said. I work in residential construction and the last company I worked for often tried to bill prior to works being completed. Our clients withheld money and really there was nothing the company could do. They tried to be nasty and tell people to pay or they would slap them with 20% interest if the claim was not paid within 5 days, but at the end of the day you can not claim works that hasn't been completed. It's like you going into work and saying I demand to be paid for the next month up front now and if you don't I will charge you interest. Well no, you haven't work you don't get paid. Simple as that. Just tell the company you have referred to the HIA contract and you will not be paying and claims until the works have been completed on site and if they want to keep invoicing you prematurely and being difficult, you will refer the matter to the housing industry of Aus for mediation. Good luck! My building forum: viewtopic.php?f=31&t=49650&p=756654#p756654 Building the 'Ultimate St Marks' with Home Buyers Centre Re: Delaying payment of stage invoice until work finished? 8Jul 23, 2011 5:38 pm Sorry forgot to mention... They can't invoice you early and then when the stage is completed, expect their claim to be paid immediately. If they invoice you early for works not complete, they need to reissue the invoice with the correct date on it when the stage is complete so the timeframe to pay starts anew. My building forum: viewtopic.php?f=31&t=49650&p=756654#p756654 Building the 'Ultimate St Marks' with Home Buyers Centre Re: Delaying payment of stage invoice until work finished? 9Jul 23, 2011 6:59 pm zozo Thanks very much for your replies. And to zeitgeber, thanks heaps, that helps so much. There is a comment on the contract, written on the progress payment page stating "the customer must not withhold payment for whatever reason". I would like to think that this does not override the terms and conditions of the standard HIA contract. I would think that the standard HIA contract provisions regarding payment override any "amendments" they might have slipped in (especially hand-written ones) - indeed I suspect any such amendments may possibly invalidate the HIA contract itself as a legally binding document and thus the conditions stated within the contract should not be altered in any way apart from filling in the required details such as price, estimated maximum build time allowances, progress payment percentages, etc and the required signatures/initialing of each page to acknowledge its contents have been read and understood. There is good reason why reputable builders use a standardised HIA building contract, to protect both of the parties involved and ensure they both understand their rights and obligations. Some people apparently have nothing better to do than comment on other people's sigs. Re: Delaying payment of stage invoice until work finished? 10Jul 23, 2011 8:10 pm We didn't pay until stages were complete and held off paying until we confirmed we were happy. They don't seem to mind you paying interest on a house you can't live in when delays occur. In hindsight I would have had an independant inspector at every stage verify as they ended up charging, then fixing for weeks after it was done incorrectly. Added a lot of time to our build. Re: Delaying payment of stage invoice until work finished? 11Jul 24, 2011 6:13 pm Just had a look at our contract and it seems our builder has re-written the section on progress payments so they do have the right to send progress claims prior to completion. I guess I'm sending the invoice to the bank tomorrow. Land at Chermside At tender stage 1) I had requested R6 ceiling insualtion batts, however I noticed that on some areas there are huge gaps which will allow hot air to sweep in, and also noticed black/grey… 0 918 Hi, I am approaching end of the build. My final invoice will be given to me soon to pay. Some context before I ask my question. 1. My builder wont do the landscaping or… 0 3042 of course there are legal avenues. You've already mentioned it. Sue them. I find it odd that lawyers wouldnt be willing to take on the case, given CCT evidence and… 1 14644 |