06 August, 2019
Security of Payment laws start soon
The Building and Construction Industry Security of Payment Amendment Act 2018 (the Amendment Act) and the Building and Construction Industry Security of Payment Amendment Regulation 2019 (the amending Regulation) will commence on 21 October 2019.
The Amendment Act will promote cash flow in the supply chain, increase transparency of payments and provide greater protection to subcontractors by:
- reducing the maximum time a head contractor has to pay a subcontractor from 30 business days to 20 business days;
- creating a new payment structure so subcontractors can make a payment claim at least once per month for work and make a final claim if a contract is terminated;
- allowing inspection of trust account records;
- applying accessorial liability to all offences under the Act which are capable of being committed by a corporation;
- adjudication reforms including withdrawing an application and timeframes for determining an application; and
- increasing compliance and enforcement powers for Fair Trading.
The amending Regulation has been developed to support and facilitate commencement of the Amendment Act and includes the following reforms:
- exempting owner occupier construction contracts from the operation of the Act;
- specifying the offences with respect to retention money trust accounts as executive liability offences; and
- specifying the offences under the Act and Regulation for which penalty notices may be issued and the amount of the penalty payable.