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Queenslanders working in the building and construction industry are likely to be affected by the recent Building Industry Fairness Reforms.

Stage two of the reforms, introduced through the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the Act), will commence operation on 17 December 2018.

The Act incorporates provisions from the Building and Construction Industry Payments Act 2004 (repealed) and the Subcontractors’ Charges Act 1974.

What does this mean for me?

The purpose of the new Act is to provide for a fairer and simpler progress payment system with respect to payments to subcontractors.

As of 17 December 2018, the following key changes (amongst others) will come into effect:

  • Payment claims no longer need to contain specific wording that indicates they are made under the legislation. Subcontractors will be automatically protected by the legislation;
  • When a payment claim is issued, a respondent must provide a payment schedule within the required timeframe (15 business days from receiving the payment claim or earlier, depending on the terms of the contract) or pay the amount in full by the due date;
  • If a respondent fails to provide a payment schedule within the required timeframe, they cannot issue any response to any adjudication application that may arise with respect to the payment claim;
  • Claimants will not be required to issue a “second chance notice” to respondents who fail to issue a payment schedule within the required timeframe. Accordingly, it is easier and more efficient for claimants to progress to adjudication if necessary; and
  • Claimants will have more time to prepare an adjudication application.

Note: A claimant is the person making a claim for payment after undertaking construction work or supplying related goods and services under a contract i.e. a subcontractor. A respondent is the person who receives a claim for payment and is or may be liable to pay the claimant.

The Act also incorporates a new regime providing for security of payments to subcontractors in relation to building projects with a contract value of more than $1 million (including GST), to commence in 2019. This requires head contractors to set up a “Project Bank Account” for each project where funds are held in trust for subcontractors until payments are due as part of the building contract. This regime has been trialled in relation to State Government funded projects since March 2018.

In effect, the above changes will provide subcontractors with more certainty that they will be paid for the work they have completed.

If you require information or assistance in relation to the above changes to the Queensland building and construction legislation or any other litigation matter, please do not hesitate to contact one of our friendly and informed litigation lawyers at Your Gold Coast Lawyers, McLaughlins Lawyers.

 

Author: Alex Hamlyn

Director: Ian Kennedy

Date: 14 December 2018

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