GETTING IT RIGHT UP FRONT
The construction industry is unfortunately known for its poor cash flow issues, delays in payment, and a higher level of insolvencies than occur in other industries.
But there is good news too.
Because of the issues in the construction industry, there are specific legal tools that can help you:
improve your cash flow and get paid
reduce your risk of losing money in insolvency
drive your profits and mean that you get to keep your profit margin.
Three legal tools work together to ensure that you don't lose out...
Terms of Trade
Construction Contracts Act
Personal Property Securities Act
How to do this is a secret you are not being told. They are legal tools banks use all the time - they know how to protect their money – and you are able to use the same legal tools they have.
All it takes are some simple steps:
1. Have compliant terms of trade tightening up timeframes under the Construction Contracts Act, and having a Personal Property Securities Act clause in there.
This is the secret recipe – a simple clause that gives you the right to get paid out in full, even in a receivership or liquidation of the head-contractor.It doesn’t have to be lengthy, it doesn’t have to be separately signed.It can just be part of your terms of trade attached to your quote.
2. Get those terms of trade accepted in writing.
Too hard to get a signature? Did you know that an email ‘ok’ – or even a text – can be ‘writing’? We can help set up systems to make sure you can do this easily, and are protected.
3. REGISTER the interest.
$16 protects you against projects against that head-contractor for 5 years. You just need to know how to do this, and what to include on your registration.
4. Make every invoice a Construction Contracts Act compliant payment claim.
There are 9 requirements to be a compliant payment claim under the Construction Contracts Act, and to have the benefits under that Act. A standard invoice will have about 4-5 of these already, depending how detailed you are. You can easily change your template invoice to make every invoice a payment claim, and get the protections under that Act.