Pay subbies what they are owed, nothing more
“Builders are increasingly having issues with subcontractors over delays to the work, quality of the work and subcontractors generally walking off the job for no contractual reason.
It is more important than ever for builders to put on detailed payment schedules, particularly where the claimed amount is disputed.
My recommendations are:
1Serve the Payment Schedule on time (usually 10 business days from receiving the Payment Claim).
2 Respond to each line item in the Payment Claim including a valuation of each line item and state any reasons for withholding payment.
3 Consider the following reasons for withholding payment:
- Have the works been completed as claimed?
- Are the variations that are claimed genuine? Were approvals provided in writing in accordance with the contract?
- Are there any back charges or set offs against the subcontractor related to defective works or damages to the works?
- Is the subcontractor late in completing the works entitling the builder to liquidated damages?”