In 2014, the NSW Government proposed several changes to the Building and Construction Industry Security of Payment Regulation. These reforms aimed to better protect subcontractor retention monies and strengthen transparency in relation to payments to subcontractors while minimising red tape.
NSW Fair Trading released for public comment the draft Building and Construction Industry Security of Payment Amendment (Retention Trust Money Account) Regulation 2014.
Following consultation, Regulation amendments were made and started on 1 May 2015.
New requirements apply to contracts between head contractors (or principals) and subcontractors for non-residential building projects worth over $20 million. The changes include:
Changes to the Regulation deliver further reform consistent with the Collins Inquiry’s recommendations and the original intention of the Security of Payment Act.
In August 2012, the NSW Government commissioned an Independent Inquiry into Construction Industry Insolvency. The Collins Inquiry was initiated following the rising number of construction company collapses that left thousands of suppliers and subcontractors more than $1 billion out-of-pocket.
In late 2013, the Building and Construction Industry Security of Payment Act 1999 was changed to ensure prompt payments for subcontractors. Three major changes to the Security of Payment Act have come into effect:
For more information, visit the Security of payment page.
We are currently undertaking a full review of the Building and Construction Industry Security of Payment Act 1999. This will enable a comprehensive revision of security of payment laws. For further information, refer to the Security of Payment laws page.
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