What is a proper invoice?
A written bill that meets the Act's requirements. Section 6.3 of the Construction Act says the contractor gives the owner a proper invoice monthly, unless the contract says otherwise. The 28-day clock starts when the owner receives it, so the contract should say how and where invoices are sent.
How long does an owner have to pay?
28 days after receiving a proper invoice, under section 6.4. If the owner disputes some or all of it, the owner gives the contractor a notice of non-payment within 14 days of receiving the invoice, saying how much is not being paid and why. The undisputed part is still paid on time.
How fast does payment move down to subcontractors?
Within 7 days. Section 6.5 requires a contractor who is paid on a proper invoice to pay its subcontractors the amounts owing to them within 7 days of receiving that payment. The same rule continues down the chain, which is why a late owner payment reaches every trade on the job.
What is the 10 per cent holdback?
Money the owner keeps back from each payment. Section 22 requires the owner to retain 10 per cent of the price of the services or materials supplied, as security for liens, until the time for liens has passed. The handover checklist covers the records that go with releasing it.
What should a fit-out contract settle about payment?
The invoicing date and address, what makes an invoice proper under the contract, how changes are priced and billed (see recording scope changes), and how the holdback will be released. Commercial general contracting sets out who handles what. This guide is free to use and quote with credit to Cruzz Construction.
| Step | Time limit | Section |
|---|---|---|
| Contractor gives a proper invoice | Monthly, unless the contract says otherwise. | 6.3 |
| Owner disputes the invoice | Notice of non-payment within 14 days of receiving it. | 6.4(2) |
| Owner pays | Within 28 days of receiving the proper invoice. | 6.4(1) |
| Contractor pays subcontractors | Within 7 days of receiving payment. | 6.5(1) |
| Holdback | 10 per cent retained until lien rights pass. | 22(1) |