How do I enforce my payment claim under BIFSOPA?

Tips on what you can do to receive payment

The new BIFSOPA act is now in effect, which means your business practices must change with it. In this blog post, the MDL Construction Law team run you through how you can enforce your payment claim to comply with the new procedure.

An example of when you must enforce a payment claim         

In this example, let’s say you issued a 14-day invoice and you haven’t been paid after 15 days. Another five days go by, and you’ve now realised that the developer hasn’t issued the payment schedule. What do you do?

In this scenario, the developer has missed his opportunity to defend an adjudication – but the clock is now ticking on you. If you don’t act quickly, you’ll lose your payment claim adjudication entitlement for this month.

What you must do to enforce a payment claim

Because there is no longer a 2nd notice warning under BIFSOPA, you must issue a letter of demand stating that your contract time has expired without payment.

This letter of demand should state that the debtor’s 25 days for payment schedule delivery is about to expire, leaving you with only 5 days to commence proceedings or adjudicate. They should either pay you or face legal action.

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If you don’t send this letter of demand (on day 26) and let the five days lapse, then you will have to go back and issue a NEW payment claim – yet you can’t issue a new claim again in the same calendar month.

For this reason, you must act within 5 days, or you’ve lost a month’s cash flow – which can be crucial for your business.

You’ve enforced your payment claim under the Act within the time limits of the legislated 25-day payment schedule.

Got questions about BIFSOPA? Talk to MDL

If you’re not sure how the new BIFSOPA will affect your business, McCarthy Durie Lawyers can help. Contact our experienced Building and Construction Law team on 3370 5100 or fill out the contact form here.