News & Views

17th November 2017

New Building Industry Fairness (Security of Payment) Act 2017

The new Building Industry Fairness (Security of Payment) Act 2017 was assented to by the Governor of Queensland on Friday 10 November 2017 and caught the construction industry in Queensland by surprise. This new legislation repeals and replaces the Security of Payments Act.  Usually new legislation commence upon assent, but the new Act will only commence upon proclamation.  NECA will let members know when the changes take effect.  The new Act will make significant changes to both claimants and respondents rights and obligations in respect of payment claims under construction contracts.
 
 
NECA Queensland will present a series of workshops for our members in the next month with important information about how these changes will impact on your business. 
 
Our first workshop will be held on:
Date: Wednesday 22 November 2017 
Time: 3.00 pm
Venue: Construction Training Centre, Salisbury. 
 
Please email NECA to register.
 
The following is a summary of the key changes:
 
Security of Payment 
  • All progress claims are now payment claims under the Act and claims will not have to be endorsed with the words  “This is payment claim under the Building and Constructions Industry Payment Act ..”;
  • The Act provides a final reference date even if contracts are terminated;
  • Payment claims may be "given" as opposed to “served” on a person liable to make payment;
  • Respondents must provide a payment schedule within the shorter of the period specified in the contract, the due date or 25 business days of receipt of a progress claim, otherwise claimants may proceed to adjudication (after the due date) without further notice or apply for judgment in Court;
  • Claimants will only be required to issue a “Warning Notice” 5 business days before commencing recovery proceedings in a Court of competent jurisdiction and Respondents will no longer have a second opportunity to provide a payment schedule;
  • Failure to give a payment schedule in response to a payment claim will be a ground for disciplinary action under the QBCC Act with a maximum penalty of $12,615 (unless the respondent has a reasonable excuse);
  • Failure to pay the adjudicated amount will also be a ground for disciplinary action under the QBCC Act with a maximum penalty of $25,230;
  • The time for making an adjudication applications is now be extended to 30 business days after receipt of the payment schedule, or failure to pay the amount claimed by the due date;
  • If a Respondent pays less than the amount stated in a payment schedule, the claimant has 20 business days to apply for adjudication;
  • The maximum amount for fees and expenses payable to an adjudicator for deciding an adjudication may also be prescribed by regulation.

 

Project Bank Accounts                    

  • Project Bank accounts are required for all government building contracts between $1million and $10million where more than 50% of the contract price is for building work;
  • Project Bank accounts will only be required for government building contract that are issued or advertised for the first time on or after  the Act is proclaimed and does not apply on existing contracts or tenders;
  • Project Bank accounts are not required for residential construction, unless the principal is the Department and the contract relates to 3 or more living units;
  • Project Bank accounts are also not required for maintenance contracts;
  • The new Project Bank Account regime is complex and there are significant penalties for failure to comply with the new  obligations ranging from $12,615 - $63,075 or 2 years imprisonment.