Changes To NSW Security Of Payment Legislation Now In Force

If you’re a building contractor, subcontractor, consultant, supplier or principal in the contractual chain, you need to be aware of this. As of 21 April 2014, the new amendments to the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) came into effect. The Act applies to construction contracts in NSW – excluding residential building work and a few other narrow categories – and provides a mechanism for anyone that undertakes work under such a contract to get paid by way of progress payments. This blog will take a quick look at the new amendments.

The amendments apply to all contracts entered into on or after the effective date, 21 April 2014, and include:

(a)   introducing statutory time periods in which payment claims became due and payable – 15 business days for a principal to pay a head contractor and 30 business days for a head contractor to pay a subcontractor;

(b)   removing the need for payment claims to be specifically endorsed as claims made under the Act;

(c)   introducing mandatory contractor statements – for a payment claim to be valid the claimant must also provide a supporting statement, the form of which is prescribed in the regulations; and

(d)   introducing an enforcement mechanism to ensure compliance with the requirements and time periods – a fine of up to $22,000 or 3 months imprisonment or both for a head contractor who serves a payment claim without a supporting statement or who serves a payment claim accompanied by a supporting statement which it knows to contain a false or misleading statement.

The above is not intended as legal advice. You should obtain legal advice in relation to your own specific circumstances.

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