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What’s Happened to the Subcontractor Charge?

Relax.

Subcontractors can still become secured creditors and protect their hard earned.

The Subcontractor Charges Act can now be found in chapter 4 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“BIFA”).

It is more or less the same process as before. Time limits and attention to technical detail remain very important.

If you are a subcontractor, owed money by a contractor for building related work, then you may be able to serve a Notice of Claim on the person obliged to pay the contractor (the head contractor or principal usually). This is a subcontractors’ charge.

By serving this notice correctly, a subcontractor becomes a secured creditor of the contractor, and in the event of insolvency may have a priority claim or be allowed to commence or continue with legal proceedings.

If eligible, and if the Notice of Claim is completed correctly and served within time, it is the head contractor’s responsibility to pay to the subcontractor, the money owed to it by the contractor.

What time limits apply?

Within three (3) months after the completion of works; or
After completion – for retention money – within three (3) months of the expiration of the defect liability period.

Remember the Subcontractor Charge alone does not guarantee payment. The contractor can still dispute your entitlement (faulty work, etc). Also, if there is no money owing by the head contractor then there will be nothing to attach to.

It remains an imperfect regime although it is almost always better than sitting back and doing nothing if you are owed money.

Contact Bruce Pasetti 07 3152 4402 or bruce.pasetti@stratoslegal.com.au

Remember time is critical

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