LIABILITY OF AN OWNER WHO IS NOT A RESPONDENT
If the construction site is owned by an associate of the respondent (as that term is defined in section 7 of the Act), the claimant may apply for an adjudicator’s determination that the owner of the construction site is jointly and severally liable with the respondent to pay the claimant the amount claimed in the adjudication and seek approval for a charging order in respect of the construction site.
This is a powerful tool for securing payment in cases where the payer seeks to separate property ownership from the contracting entity for the purpose of making the asset unavailable to a creditor in the event of insolvency or bankruptcy, by holding the property in the ownership of a related person or entity over which the payer holds control or equity rights.
For construction contracts entered into before 1 December 2015, this means of securing payment is not available in respect of a residential construction contract as that term was defined in section 5 of the Act.
For construction contracts entered into or renewed from 1 December 2015, this means of securing payment is not available in respect of a construction site owned by:
- an individual who is occupying, or intends to occupy, wholly or mainly as a dwellinghouse, the premises that are the subject of a construction contract; or
- a family trust which is occupied, or intended to be occupied, wholly or mainly as a dwellinghouse by any beneficiary of the trust.