The ways your contracts and systems need to change
BIFSOPA is now in effect and applies to existing AND new contracts. All payment claims are claims under the new Act, which is important because it affects many aspects of your business.For example, the Act affects:
Payment claims
Claims after practical completion
Payment schedules
Pre-conditions to payment
Liquidated damages
Security
Retentions
Warranties
Time bars
Set-offs
How your contracts need to change with BIFSOPA
To ensure your business complies with BIFSOPA, you need to:
Watch out for new terms and conditions in a developer’s contract, and
Make sure your contracts comply with the new Act.
Payment claims no longer need to be endorsed – which impacts on the automatic use of reference dates where time limitations for adjudication have changed. There is also relief from needing to issue a 2nd chance notice.The reference dates you used to rely on may be automatically used and expired – and your cash flow can be set back to your next payment claim date.
How your systems need to change under BIFSOPA
You should immediately review the way your office currently operates. With BIFSOPA, all time limits are critical – and all have changed.Download our free flowchart to see how BIFSOPA affects your business's systems.
How forms have changed with BIFSOPA
If your payment claims are not compliant, they can be deemed invalid
The effect of not endorsing “This is a payment claim under the Act” is no longer an option, as it must be under the Act.
Some forms have disappeared – for example, the old “Section 20A second warning notice” is gone.
This means you:
Can adjudicate (and be adjudicated against) immediately
Can sue or be sued immediately, without an ability to defend.
May get a stay where the court won’t require that payment. But if that doesn’t happen, you may have to hand over the disputed sum — and only then set the wheels in motion to claim it back.
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.