When it comes to any progress payments on building design projects, certain rules and guidelines must be followed.

For one thing, builders are not legally permitted to accept any payments (deposit and/or progress payment) until the owner has been supplied with a copy of the domestic building insurance policy. Labor cannot start until this step has been taken.

The schedule of progress payments always should be established in the project contract.

These payments frequently are processed at the base, frame, lock up and fixing stages. There will be in place a standard progress payment schedule or the parties can establish an altered schedule. The contract also details the process by which claims will be made. After every stage is attained, the builder supplies the owner with a written progress payment claim which then must be paid – usually within a week.

In situations where claims are paid tardy or not at all, builders can according to the contract:

  • charge interest for the interval the claim stays unpaid – the applicable rate is often outlined in the contract,
  • suspend work while the claim stays unpaid,
  • end the contract where claims stay unpaid (with appropriate notice to owners).

With owners usually sending claims to the bank for processing, the seven-day timeframe is frequently tight. If a delay might incur, owners should talk with their builder.

At the culmination of the building project, a specified process is in place in regards to the last payment claim. A last inspection is completed by the owner, the building surveyor and/or the owner’s own building inspector. Providing that the property is free of problems and the work is done in accordance with plans and specs, either an Occupancy Certificate and/or a Certificate of Final Inspection is supplied. With every stage, the owner (or their inspector) must affirm that the work to date has been completed in accordance with the contract and building laws and regulations.

In the case of any doubt, always consult the contract.

 

Source: Sourceable.Net