Were you aware that overdue claims made under the Building and Construction Industry Payments Act (“BCIPA”) attract interest?
Furthermore, if your payment claim goes to adjudication, and you’re successfully, the adjudicator will usually make a ruling on the interest rate your overdue claim will attract.
This blog pot gives you further information on the claimant’s entitlement to interest as well as an explanation of the interest penalty rate in the Queensland Building and Construction Commission (“QBCC”) Act means in terms of adjudication in Queensland.
Entitlement to interest
A claimant’s right to interest on overdue payments is provided in Section 15(2) and(3) of BCIPA
Interest is not only applicable to the adjudicated amount in adjudication decisions but can also be claimed in progress claims in certain circumstances.
Where a payment claim is made under the BCIPA and the respondent fails to provide a payment schedule within the required timeframe under the BCIPA, the claimed amount is due and payable on or before the due date for payment (s19(2) of the BCIPA).
If the claimant does not proceed to adjudication in respect of this payment claim, the claimant is entitled to claim interest for each day of delay immediately following the due date for payment in subsequent payment claims.
The magic of s67P interest
In an age where the banks are offering annual deposit interest rates in the low single digits, the QBCC Act Section 67P penalty rates are generous at around 12.3% p.a. compounded daily.
Where applicable QBCC Act Section 67P provides a significant deterrent to respondents which wish to delay payment of progress payments.
Many claimants ignore their entitlement to interest in progress claims even where this can be a significant sum of money.
If you’re not claiming the appropriate interest rate on overdue payment claims, you’re doing yourself a financial disservice.
Get in touch for more information.
Adjudicate Assist is a specialist company dealing with all aspects of security of payment legislation throughout Australia and providing expert help to those wishing to utilise the Building and Construction Industry Payments Act. Get in touch today.
If in doubt – seek expert assistance from Adjudicate Assist.