Please note that we do not provide legal advice. It is always important before taking any collection action, to get independent legal advice as there is no "one cap fits all" situation.
SCC's can be effective in limited circumstances.
- If you are a trade that finished early in the project and the amount is large (say over 40k) the Subbies Charge can be handy.
- If you are a later finishing trade and the amount owed is small then it is a cost-benefit issue and BCIPA can be a cheaper option.
The effectiveness of Subcontractors Charges (SCC) depends on the time that you serve them, who the developer is, the amount owed to you and the amount the developer owes to the builder.
If the builder is tottering on collapse, the best scenario is to serve SCC before the QBCC cancels the builders license.
- If their license is cancelled, the developer can cancel their contract and my understanding is that the Subbies Charges have less chance of success.
- As of today (20.02.17) Subcontractors Charge cost is $2200 to set up, $275 to certify and then 1 month after it's served, it will cost a further $3000 to prepare the paperwork and forms for Magistrate Court proceedings.
- They are only effective if the developer is holding money owed to the builder.
- If the builder liquidates, it then becomes a Supreme Court action (more expense).
Is Lodging a Subbies Charge cost Effective?
- If you are owed less than say $40,000, it may not be cost effective considering the initial fees then the preparation of documents for the Magistrates Court.
- If the developer owes the builder say a total of $150,000 but the builder owes the subcontractors a total of $500,000, it would be uneconomical to issue a SCC as the value is not there to support the cost of the claim taking into account other claims.
- Other Subbies may have charges lodged and the funds pool would be too small.
Its imperative that you have the correct details for the developer. If you don't have it, your solicitor can request it from the builder.
This Act has the effect to 'freeze' the funds that are owed until a resolution is reached in court or by negotiation.