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The Border Mail and subcontractors alliance, Subbies United, are reporting that losses are being incurred by subcontractors following non-payment by builders.
Some subcontractors are reporting losses dating back to 2013 with many owed over $10,000 by builders who simply refuse to answer calls demanding payment.
Rob Berry, a consultant to Subbies United, said in a statement, "For a long time the Victorian Building Authority has been the toothless tiger as a regulator. Builders can altogether fall off the planet and you’ve got to take legal action against the company. There’s no middle ground, you’ve got to take legal action or nothing." Mr Berry went on to say, "A lot of subbies wait cap in hand hoping the builder is going to pay. When they do go through the formal process they’ve lost a lot of time waiting and they might be beaten by the clock and when the sums are too big taking legal action can entrench the issue."
While the Victorian State Government established the Building & Construction Industry Security of Payment Act 2002 ("SOP Act") a glance at the flowchart provided by the Security of Payments Act website shows a complicated and lengthy process where it would appear that if precise time-frames are not followed that payment will not be forthcoming, or if amounts are too large, that individuals would need to commence legal proceedings in which to recover their debt.
Chief Executive of Master Builders Association Victoria, Radley de Silva, said, "Master Builders believes that the three months period contained in the security of payments laws is a generally sufficient window for a subcontractor to make a claim, considering that there will still exist traditional avenues to pursue any outstanding payments, such as through the courts."
Mr Berry went on to comment that he believes that a project bank account should be established to circumvent the builders having control of funds as is the standard in most OECD countries.