The adequacy of Malaysian security of payment legislation for sub-contractors in construction industry

Azizan Supardi, Hamimah Adnan and Mohammad Fadhil Mohammad

MPRA Paper from University Library of Munich, Germany

Abstract: In Malaysia, the particularly small sized subcontractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act). However, they need to enhance their knowledge of the so-called the ‘Security of Payment’ Regime to benefits from the Act. Due to this, this on-going research attempts to introduce payment framework to the sub-contractors, in giving the knowledge, to claim for payment. This paper, though, is to disclose the finding of the level of knowledge that the sub-contractors have to the proposed Act, by preliminary analyzing the quantitative questionnaire survey. It was found that the adequacy of security of payment framework to the particularly small sized sub-contractors needs to be produced, and the analysis on effectiveness of the various avenues incorporated in the construction contract or statutes in the other developed countries as well as the proposed Act needs to be done. However, as long as the regime remains in proposal, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment.

Keywords: legal readiness; Malaysia; sub-contractors; security of payment; construction industry (search for similar items in EconPapers)
JEL-codes: K12 K32 L74 (search for similar items in EconPapers)
Date: 2011-07-05, Revised 2011-07-05
New Economics Papers: this item is included in nep-cis and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Sixth International Conference on Construction in the 21st Century (2011): pp. 677-684

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