As we have covered in a previous article (see here), 2019 is the year of change for NSW’s security of payment legislation. In November 2018, the NSW Government passed the Building and Construction Industry Security of Payment Amendment Act 2018, which introduces significant amendments to the Building and Construction Industry Security of Payment Act 1999 (Act).
In July 2019 it was confirmed that these amendments would commence on 21 October 2019 (rather than in stages as previously speculated) and apply to prospectively to construction contracts entered in into after that date.
A more in-depth explanation of the amendments can be found in our previous article but as a refresher the key amendments to the Act are:
- Officers from the Department of Finance, Services and Innovation have new powers to investigate, monitor and enforce compliance with the Act;
- The concept of executive liability has been introduced, exposing directors and management to prosecution if a corporation commits an offence under the Act;
- Tougher maximum penalties apply, especially in regards to failing to provide a supporting statement;
- Jurisdictional errors made by adjudicators are reviewable by the Supreme Court (this confirms previous decisions of the courts);
- Companies in liquidation can no longer serve a payment claim or seek to enforce them;
- The reference date concept has been removed;
- Payment claims must again state that they are made under the Act;
- The due date for payment to subcontractors has been reduced to 20 business days (from 30 business days);
- Residential owner-occupier exemptions in the Act have been removed; and
- The threshold for retention moneys that must be held in a trust account has been reduced to $10 million.
What this means for you
As can be seen from the above, these new amendments are significant and wide ranging. Parties involved in the NSW construction industry have just over one month to consider how these amendments will effect their business and construction contracts before they commence on 21 October 2019.
If you or someone you know wants more information or needs help or advice in relation to NSW’s security of payment legislation, please contact us on +61 (02) 9248 3450 or email firstname.lastname@example.org.