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If you are owed money from the homeowner, consider the following first:
Builders and contractors can use the rapid adjudication process under security of payment laws in NSW to recover overdue payments from a homeowner quickly and in a less expensive way compared to traditional legal proceedings in court.
Builders and contractors can serve a payment claim on a homeowner if the contract was entered into after 1 March 2021.
A letter of demand is a notice to the other party asking for money to be paid. It warns the other party that if payment is not received by a certain date, you may start a legal proceeding to recover the money they owe you plus any additional permitted costs.
It should clearly identify the sum of the money owed, and the timeframe for the money to be paid (generally 7 days)
Information about writing a letter of demand for smaller debts can be found at LawAccess NSW. Formal legal advice should be sought for larger amounts.
If the above options are unsuccessful, you may consider commencing legal proceedings in court or tribunal. Where you commence your legal proceedings in will depend on the value of the debt.
NCAT is a specialist tribunal that can hear and resolve disputes about residential building work in NSW up to the value of $500,000. It is less formal than the court system for recovering money for home building disputes. NCAT can also make orders against a homeowner for non-payment of building work.
Some key facts about commencing action in NCAT:
Note: If a claimant commences a building claim in a court, and that claim could have been commenced in NCAT, the defendant can elect to transfer the proceedings to NCAT instead.
The first step in having your case heard in a court hear is to fill out a statement of claim. Guidance material is available for recovery of smaller debts in the Small Claims division of the Local Court.
Another viable option available is through a debt collection service where a business will attempt to recover money for you for a fee.
Information on your options and how to use a debt collection service.
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