New year, new changes. This is certainly true for the building and construction industry as it faces significant improvements thanks to the Building Industry Fairness (Security of Payment) Act.
The Act was first introduced to Parliament in August 2017 and received royal assent on November 2017. Set to take effect early this year, the Act aims to bring about significant reform to the security of payment for contractors in Queensland.
If you’re not quite familiar with this new legislation, we’ve come up with a quick overview of the things you out to know.
What You Need to Know About The New Building Industry Fairness Act
- Major Improvements to Security of Payment. Essentially, the Act seeks to ensure that everyone in the building industry are duly compensated for the work they do. Its objectives include:
- Improving the security of payment for subcontractors in the building and construction industry by establishing a framework for Project Bank Accounts (PBAs);
- Modernise and simplify the provisions for making a subcontractors’ charge;
- Increase ease of access to security of payment legislation;
- Improve legislation to provide increased ability of the Queensland Building and Construction Commission (QBCC) to provide regulatory oversight to the building and construction industry;
- Raise penalties for non-compliance with the legislation
2. Use of Project Bank Accounts. The Act discusses the mandatory use of Project Bank Accounts for certain construction projects. This regime will gradually be phased in over the next two years. It will begin with all Queensland Government building projects with the value of between $1 million and $10 million.From the 1st of January 2019, all construction projects above $1 million, including those by commercial, private, and government sectors will be required to use the PBAs.
3. Updates to Payment Claims Process. The Act modifies provisions of the Building Construction Industry Payments Act of 2004, implementing key changes to payment claims and payment schedules. Significant amendments are also done to streamline the adjudication process and to reduce delays caused by respondents.Other significant changes include:
- The elimination of the prerequisite to endorse a payment claim as one that is made under the Act; and
- The addition of the obligation to provide a payment schedule at all times.
Moreover, the Act also outlines processes for dispute resolutions and for dealing with phoenix corporations.
How You Can be Prepared
Since the Act outlines several updates and changes, it’s crucial for business owners and other participants in this industry to start preparations as early as possible. You can do this by:
- Becoming familiar with the amendments being introduced by reading the full-text copy of the Building Industry Fairness (Security of Payment) Act.
- Start implementing contract terms to prepare for the introduction of Project Bank Accounts.
- Go over your current processes and see if you need to make adjustments to accommodate the new payment claim and adjudication scheme.
You can make this task easier by contacting our business development managers at Slater Byrne. We’d be happy to assist you.
Liam White joined the Slater Byrne Recoveries team in early 2013. He has worked across the credit & dispute resolution industry for a number of years. He is currently working in a Marketing/Head of Sales capacity at Slater Byrne Recoveries.