Practical Completion and Final Payment

Practical Completion

Practical Completion and Final Payment…

 

Building and Construction in Queensland

What is practical completion?

Practical completion can be difficult to navigate. Contracts will generally provide a completion date in which the works under the contract are to be completed by.  However, in some cases that date may not be met.

Practical Completion generally means the work has been completed in accordance with your contract and any statutory requirements except for minor defects and omissions and it is reasonably suitable to inhabit.  Your contract may define practical completion.

The QBCC Act 1991 (Qld) (the ‘Act’) defines practical completion for building work carried out under a building contract that is not a domestic building contract, as: –

(a) the day practical completion of the work is achieved, as worked out under the contract; or

(b) if the contract does not provide for the day practical completion of the work is achieved—the day the work is completed—

(i) in compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work; and

(ii) without any defects or omissions, other than minor defects or minor omissions that will not unreasonably affect the intended use of the work.

The Act also defines practical completion, for a domestic building contracts, as the day when the subject work is completed: –

(a) in compliance with the contract, including all plans and specifications for the work and all statutory requirements applying to the work; and

(b) without any defects or omissions, other than minor defects or minor omissions that will not unreasonably affect occupation; and

(c) if the building owner claims there are minor defects or minor omissions—the building contractor gives the building owner a defects document for the minor defects or minor omissions.

Most contract’s definition of practical completion will be similar to, if not the same as the definition of practical completion provided under the Act.

If you believe the construction works undertaken have reached practical completion, you should refer to your contract’s definition of ‘practical completion’ (if any) and the definition provided under the QBCC Act and make sure the works are practically complete in accordance with those definitions.

Your contract may also set out the steps to be taken once the works have reached practical completion. If so, you should also make sure those steps are complied with.  This may minimise the risk of a dispute concerning whether the works have in fact reached practical completion.

When do I issue the final invoice?

This will depend on the terms in your contract.  You should refer to your contract and comply with the terms concerning issuing the final invoice.  However, most contracts will provide that the final payment will be required once the works have reached practical completion.

When must I pay the final payment to the contractor?

This will depend on the terms of your contract.  However, generally final payment will be required once the works have reached practical completion. The contract may also provide that until final payment is made, you will not be able to take possession of the works.

What is a defect liability period?

The contract will generally set out a defect liability period and this will generally be 12 months from the date of practical completion.  This is the period in which the contractor will be liable to rectify any defects.  If you become aware of any defects in the works during the defect liability period, you should notify the contractor (preferably in writing) of these without delay.

The QBCC Act also defines defect liability period as well as provides for statutory warranties. If you want to know more about statutory warranties, you can read about it in our article on QBCC Statutory Warranties.

Practical Completion and Final Payment

I am involved in a dispute and need assistance

If you are involved in a dispute and / or need legal advice about this topic, contact us at Klein Legal today.  Klein Legal are dispute resolution and litigation experts.

This is general information only and does not constitute legal advice.

If you or someone you know wants more information or needs help or advice about this topic, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au.

 

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Avoiding Bad Debts

Bad Debts

Avoiding Bad Debts…

Bad debts

Unpaid invoices can have adverse impacts on businesses, particularly those with insufficient or low capital which are more dependent on dynamic cashflow.  It does not help that a majority of small business to business transactions are completed on a credit basis, and there appears to be an expectation that credit facilities be available when dealing with commercial agreements. This can leave businesses exposed and have higher than desired accounts receivable on their books.

Bad debt risk – 10 tips to decrease exposure

  • ensure you have a written contract in place which clearly sets out your terms and conditions;
  • when a client applies for a credit line, conduct a credit check, and peruse their historical financial position (if any) relating to prior financial agreements;
  • set conservative credit limits. To avoid over exposure and bad debts of quantity, restrict the credit limit;
  • ensure clients applying for business credit sign and acknowledge the company’s terms and conditions including applicable interest charges;
  • do not delay sending invoices. When a client receives goods and services on credit ensure they receive their invoice shortly thereafter;
  • set invoice due dates and follow up your clients as soon as the invoice becomes overdue.  Also, remain diligent with following up your client in a repetitive and consistent manner regarding any outstanding invoices;
  • ensure that you have multiple ways of contacting your client including emails, phone numbers and postal addresses in case they stop acknowledging or responding to your contact;
  • try to avoid ‘monthly pay run’ responses from companies. Some companies will only process payments to providers of goods and services on one day a month. If this is not within your terms and conditions, make sure you reiterate this to them;
  • seek advice about what insurances you can have in place to minimise bad debts applicable to your business; and
  • if clients have failed or delayed in repaying credit amounts do not allow them to overdraw on your credit facility and consider returning them to ‘cash on demand’ status.

Preventative measures are better than remedies for bad debts. If recovery action becomes necessary, this can be costly.

Bad Debt - Debt Recovery

I hold bad debts… I need assistance

If you have outstanding bad debts and you need assistance contact Klein Legal today. Klein Legal are experts in debt recovery.

This is general information only and does not constitute legal advice.

If you or someone you know wants more information or needs help or advice about this topic, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au.

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Estate Administration

Estate Administration

Estate Administration…

 

Responsibilities of Executors / Legal Personal Representatives

This article relates to the administration of an estate in Queensland.

Administering an Estate

If the deceased had a will when they passed, there will be executor(s) appointed under the Will.  The executor(s) named under the Will usually administers the deceased estate.  In circumstances where the Executor(s) named in the will is unable or unwilling to perform their role, or where the deceased died without a will, then a legal personal representative is appointed as administrator under a grant of letters of administration issued by the Supreme Court and this person(s) will administer the estate.

If you are appointed as an executor of a deceased’s estate under their Will or have been appointed a legal personal representative to administrator the deceased estate you have a responsibility to administer the estate legally, appropriately and in a timely fashion and if there is a will then, in accordance with the deceased’s Will.

Personal Liabilities

Executors and legal personal representatives can be held personally liable for incorrectly administrating the deceased estate or breaching their duties as an executor or legal personal presentative.

It may be prudent to not distribute the estate to beneficiaries before 6 months has passed since the date of death of the deceased.  The reason being, if an eligible person makes a claim against the deceased estate and the executor / personal representative had already distributed the estate to the beneficiaries before 6 months from the date of death, there is no longer money of the estate to recover against.

The executor / legal personal presentative may be held personally liable for ensuring an equitable distribution if the Court finds that the eligible person was entitled to a provision from the estate and there are no longer monies available to make that provision.

However, if the executor / personal representative distributes the estate to beneficiaries after 6 months has passed from the date of death and has not received any notice from any eligible person(s) of their intention to make a family provision claim against the estate within those 6 months, the executor / legal personal representative may no longer be held personally liable to account to any eligible person(s) for distributing the estate to beneficiaries.

Executors / legal personal representatives can also be held personally liable for outstanding tax liabilities of the deceased if they distribute the estate to beneficiaries without first satisfying these liabilities from estate funds.  However, this liability is capped at the value of the assets of the estate.  The executor / legal personal representative may be able to recover the monies the executor becomes personally liable to the ATO for from the estate or beneficiaries that received a distribution from the estate.  However, recovery of these monies may be problematic particularly if the beneficiaries no longer hold the funds from the estate.

The role

The primary responsibility of the executor is to act pursuant to the wishes and Will of the deceased. An executor / legal personal representative will need to identify and gather assets belonging to the deceased, pay existing debts and liabilities of the deceased and disseminate the residue of the estate to the named beneficiaries pursuant to the will and if there is no will, then pursuant to the Succession Act 1981 (Qld).

An executor / personal representative also has a fiduciary duty to the beneficiaries. This means they must act in the best interest of the beneficiaries.

Additional duties

Other tasks of an executor can include: –

  • funeral and burial arrangements;
  • obtaining Probate of the will or letters of administration (where there is no will); and
  • maintaining of record of the administration of the estate.

Timeframe to administer an Estate

In Queensland, there is no time limit within which to distribute the estate.  However, the administration of the estate should be undertaken in a timely manner. Generally, 12 months is an appropriate timeframe for the administration of an estate unless there is ongoing estate litigation. In this time, the executor / personal representative should have identified all assets belonging to the deceased, settled the accounts with creditors and distributed the residue estate to the beneficiaries.

Conflict of Interest

An executor of an estate can be a beneficiary as well.  However, the executor must remain impartial to their own bias existing from being a beneficiary. The executor must continue to make decisions regarding the estate that would not impede the equitable distribution of the estate.

In certain circumstances, it may be possible to apply to the Court to remove an executor in substitution with another person.

If you are an executor appointed under a will or a legal personal representative appointed to administer the estate and are unsure about your role and duties, you should seek legal advice.

Estate Administration

I am an executor… I need assistance

If you believe you may need assistance with the administering of an estate, contact Klein Legal today. Klein Legal are experts in estate administration.

This is general information only and does not constitute legal advice. 

If you or someone you know wants more information or needs help or advice about this topic, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au

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Litigation Lawyers

Litigation Lawyer

Litigation Lawyers…

What is litigation?

Litigation is the process of commencing legal action against another party.

What is a litigation lawyer?

A litigation lawyer (Litigator) is a legal practitioner who assists client in resolving disputes pertaining to civil, criminal or commercial matters. You may need a litigation lawyer to assist you where, for example, a dispute, breach or other alleged wrongdoing has occurred.  A litigation lawyer will work with you through the relevant Court processes and assist you in reaching a resolution of your matter or dispute.

Why might I need a litigator?

Estate Litigation

You may need a litigation lawyer to assist you if a dispute has arisen during the administration of a deceased estate. For example, if you are contesting a Will or defending a claim brought against the estate, disputing the validity of a Will or are involved in a testamentary trust dispute. Estate litigation is predominantly governed by the Succession Act 1981.

General Commercial Litigation – Civil Litigation

You may require the services of a litigation lawyer in to assist you with a commercial dispute.  Commercial disputes often involve a dispute concerning money or something of monetary value. Some commercial disputes include (but are not limited to): –

  • Contractual disputes;
  • Shareholder, director and partnership disputes;
  • Commercial lease disputes;
  • Retail shop lease disputes;
  • Residential tenancy disputes;
  • Insurance disputes; and
  • Property disputes.

Building and Construction Litigation

The building and construction industry in Queensland is highly regulated.  If you work in this industry or are a consumer of services in this industry at some stage, you may require the assistance of a litigation lawyer. Some disputes that may arise in the building and construction industry may include (but are not limited to): –

  • breach of a building contract;
  • disputes concerning payment of monies;
  • defective workmanship;
  • complaints made to the QBCC including directions to rectify;
  • disputes concerning variations to a building contract;
  • disputes about delay in completion of the works under a building contract; and
  • subcontractor’s charges.

The above is not an exhaustive list of the services which a litigation lawyer may be able to assist you with.

I need a litigator!

Litigation Lawyer

If you believe you may need the assistance of a litigation lawyer, contact Klein Legal today.  Klein Legal are experts in litigation and dispute solutions.

This is general information only and does not constitute legal advice.

If you or someone you know wants more information or needs help or advice about this topic, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au.

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Wills and Estates Litigation

Estate Litigation

Wills and Estates Litigation…

Have You Been Left Out of a Will?

In Queensland, if you are a spouse, child or dependent of a deceased but have not been provided for or adequately provided for under their Will, you may be eligible to make a claim against their estate commonly known as a family provision application. In certain circumstances, the Court may award eligible persons who have not been provided for or adequately provided for under a Will, provision or further provision against a deceased person’s estate.

How long do I have to file a family provision application?

Eligible persons have six (6) months from the date of death of the deceased to notify the executor / representative of the estate of their intention to bring a family provision claim against the estate and nine (9) months from the date of death to file the application in a competent Court. It is very important that you file the application against the estate within this time, otherwise, you may no longer be able to bring the application against the estate.

Are you eligible to make a family provision application?

According to the Succession Act 1981 (Qld), the following persons are eligible to bring a family provision application against an estate: –
  • Husband, wife or de facto of the deceased (Section 5AA);
  • Child of the deceased (Section 40); and
  • Dependent of the deceased (Section 40).

Will this process result in an equal distribution of the estate?

The Court typically will not redistribute the estate based on inequality, rather where the inequality has led to an inadequate provision for a beneficiary or potential beneficiary.  Therefore, if all beneficiaries have been provided for adequately as deemed by the Court, the inequality of estate distribution will not hinder the distribution of the estate or the Will (Section 41 (1)(A)).

How does the Court ascertain what an ‘adequate provision’ is?

The Court will look at various factors when determining whether someone should have been provided or whether they have been ‘adequately’ provided for by the deceased, including but not limited to: –
  • the size of the deceased’s estate;
  • the financial standing of the person who has brought the application for family provision (the ‘Applicant’) and any other beneficiaries or potential beneficiaries;
  • the demographic of the Applicant (Age, gender overall health);
  • the relationship the Applicant had with the deceased; and
  • the independence or dependence of the Applicant on the deceased.
Wills and Estates Litigation  This is general information only and does not constitute legal advice. If you or someone you know wants more information or needs help or advice about this topic, please contact us on (07) 5458 6855 or email mklein@kleinlegal.com.au.
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