New South Wales Consolidated Acts

HOME BUILDING ACT 1989 - SECT 8A

8A Maximum progress payments (other than small jobs)

(1) This section applies to a contract to do residential building work when the contract price exceeds the prescribed amount or (if the contract price is not known) the reasonable market cost of the labour and materials involved exceeds the prescribed amount. The
"prescribed amount" is the amount prescribed by the regulations for the purposes of this section and is inclusive of GST.

(2) A progress payment for residential building work under a contract to which this section applies is authorised only if it is one of the following kinds of authorised progress payments--

(a) a progress payment of a specified amount or specified percentage of the contract price that is payable following completion of a specified stage of the work, with the work that comprises that stage described in clear and plain language,

(b) a progress payment for labour and materials in respect of work already performed or costs already incurred (and which may include the addition of a margin), with provision for a claim for payment to be supported by such invoices, receipts or other documents as may be reasonably necessary to support the claim and with payment intervals fixed by the contract or on an "as invoiced" basis,

(c) a progress payment authorised by the regulations.

Note : Progress payments can extend to variations to the work to be done under the contract.

(3) A contract can provide for more than one kind of authorised progress payment.

(4) A person must not--

(a) demand or receive payment of a progress payment under a contract to which this section applies unless the progress payment is authorised under this section, or

(b) enter into a contract to which this section applies under which the person is entitled to demand or receive payment of a progress payment unless the progress payment is authorised under this section.

: Maximum penalty--1,000 penalty units in the case of a corporation and 200 penalty units in any other case.

(5) This section does not apply to a progress payment for residential building work under a construction contract to which the Building and Construction Industry Security of Payment Act 1999 applies.

(6) This section does not apply to--

(a) a contract that is made between parties who each hold a contractor licence and is for work that each party's contractor licence authorises the party to contract to do, or

(b) a contract to do specialist work that is not also residential building work.

Note : The exception in paragraph (a) applies to a subcontracting arrangement between licensees, and to a contract between licensees for work to be done on premises that one of the licensees owns.