1.    A Payment Claim is a builder or contractor’s claim for payment under the Construction Contracts Act.

2.    It is not the same as an invoice and is a more powerful tool for getting paid on time.

3.    A payment claim must:

a) be in writing;

b) contain sufficient details to identify the contract to which it relates;

c) Identify the work and relevant period to which the Payment Claim relates;

d) State the claimed amount and the due date for payment;

e) Indicate how the claimed amount was calculated (for example, by attaching or incorporating a spreadsheet table); and

f) State on the document that it is a payment claim made under the Construction Contracts Act.

The Act requires all payment claims to be accompanied by:

(a) an outline of the process for responding to that claim; and

(b) an explanation of the consequences of—

(i) not responding to a payment claim; and

(ii) not paying the claimed amount, or the scheduled amount, in full (whichever is applicable).

The outline and explanation must be in writing, and in the prescribed form (“Form 1 – Information that must accompany all payment claims”). The Form is freely available from www.building.govt.nz

When can a Payment Claim be made?

Payment Claims can be made once per month unless the contract specifies other times.

When is a Payment Claim payable?

Payment Claims must be paid within 20 working days after the Payment Claim is delivered, unless the contract provides a different time frame. The date for payment must always be on the Payment Claim for it to be valid.

What happens if a Payment Claim is not paid?

If a Payment Claim is not responded to on time by a Payment Schedule and if the amount under the Payment Schedule is not paid on time the claim becomes due and must be paid. No defence can be raised as a reason for non-payment, so it is a very powerful way to make sure you get paid.

 

For our full article on Payment Claims click here.

 

Alan Knowsley