How to prepare a BIF Act Payment Claim

If you work in construction in Qld, you likely know the Building Industry Fairness (Security of Payment) Act (BIF Act). 

‍

As a claimant chasing payment under a construction contract, understanding the finer points of preparing a valid BIF Act payment claim, although potentially confusing, is essential to the ongoing success of your construction business.

Submitting a valid BIF Act payment claim is an important and essential skill to ensure payment rights are preserved, avenues for fast-track payment recovery remain open, and project cashflow is best maintained. 

In this blog, our construction contract lawyers simplify the process by providing essential tips on preparing a valid BIF Act payment claim.

Whether you’re a contractor, subcontractor, or supply construction-related goods and services, the step-by-step approach below will improve your skills when requesting payment.

Understanding BIF Act Payment Claims

A payment claim under the BIF Act is a formal request for payment. It must strictly comply with the BIF Act requirements of a valid payment claim.

A valid BIF Act payment claim improves the prospect of:

• Efficient and timely payment recovery for completed work
• Preventing unnecessary payment delays 
• Maintaining cash flow so your projects stay on track

Steps to prepare a BIF Act Payment Claim

1. Identify and address the right party

The first step is to ensure your claim is directed to the person or entity specified in the contract. This might seem straightforward, but it’s often where mistakes occur.

Here’s what to check:

• The respondent’s details: Make sure you correctly name the principal, head contractor, or subcontractor responsible for payment. Include ABN or ACN details.
• If the respondent operates as a trust, identify and address the payment claim to the trustee entity (ATF the trust), as they are responsible for payment.

Carefully review your contract and any variations or amendments and undertake necessary searches to ensure you have the correct addressee details.

2. Send the claim to the authorised person in the correct form

After identifying the correct party, you need to confirm who is authorised to accept the claim under the contract.

This could be a superintendent, representative or project manager specified in the contract.

If the contract specifies a payment claim be given in a particular way, by hand or by email, ensure the payment claim is given in that precise way. Otherwise, if previous claims have historically been accepted and paid, use the same method as before. 

To ensure the payment claim is issued in the correct form, you should:

• Request payment for the total amount claimed in the form of a tax invoice;
• Confirm all work being claimed is within the scope of the subject contract and not the subject of a separate agreement, in which case a separate payment claim can be issued;
• If the work claimed is subcontracted (and requires a third-party QBCC licence different to the claimant), identify the nature and extent of the subcontracted work and the licensed person who undertook the work; and
• Provide sufficient particulars of the nature and extent of the work claimed (discussed in 4 below).

Seek legal advice from a specialist construction lawyer before proceeding with this step.

3. Reference dates (claim dates)

Submitting your BIF Act payment claim in line with contractual claim dates or milestone dates is essential. If there are no contractual claim dates, the default monthly claim dates arise under the BIF Act at the end of each month. 

A reference date does not mean the claim must be submitted on that day. Rather, it is a date that allows work to be claimed on or after that date, for work performed up to and including that date. The BIF Act allows only 1 x payment claim for each reference date.

Here’s how to approach it:

• Check the contract for claim dates: If specific claim dates or milestones are stated or can be calculated under the contract, that constitutes a reference date for the purposes of the BIF Act.
• Default reference dates in the BIF Act: If your contract doesn’t specify claim dates or they are unable to be calculated, the BIF Act provides monthly claim dates on the last day of each month.

4. Sufficient details of the work must be provided

A valid payment claim must sufficiently particularise the amount claimed and itemise the nature and extent of each of the elements of work claimed since the previous payment claim.

5. Attach supporting documents

Your claim should be backed by detailed particulars and evidence to support the amount claimed. 

Include:

• Trade breakdowns: Detail each item of the work completed. Providing percentages of work completed for a work item is not enough - details of the work completed for each work item since the last claim must be clearly stated.
• Calculations: Provide simple, clear calculations of work performed by reference to quantities or volumes (supported by detailed descriptions) for each item of work or trade breakdown item since the previous claim, rather than simply providing a greater % complete for each trade item which is not sufficient.
• Complex claims for time and cost: For EOT, delay or disruption claims, attach works program, expert reports and contractual notices exchanged detailing the nature and extent of the EOT, delay or disruption by reference to items of work recorded in the works program.

Benefits of following best practices

Faster payments

Valid BIF Act payment claims assist in ensuring timely payment and project cash flow is more reliable.

Preservation of payment rights

Compliance with the BIF Act also safeguards your payment recovery rights, thereby opening options for faster track payment recovery, by way of Adjudication or summary judgment Application to the Court.

Professionalism

Consistently submitting valid BIF Act payment claims reflects positively on your business. It limits the potential for disputes by establishing that your business is not an easy target for non-payment or delayed payment.

Businesses are sometimes targeted for delayed and non-payment if their project or contract administration (and knowledge of their BIF Act payment rights) is lacking.

Valid BIF Act payment claims assist to strengthen your reputation and relationships within the industry. 

Always consult a construction lawyer for guidance with claim preparation, particularly for larger and more complex payment claims.

For tailored advice and guidance, reach out to Troy Legal today. Call (07) 3854 2315 or contact us online.