Disclaimer: The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

Recent Amendments to the Building and Construction Industry Security of Payment Act 1999

Peter Merity
Peter Merity

There have been significant changes made to the Building and Construction Industry Security of Payment Act 1999 ("the Act") which will affect your clients who are principals in commercial building contracts, developers, builders, contractors or subcontractors. These changes are contained in the Building and Construction Industry Security of Payment Amendment Act 2013.

The amendments deal with a number of matters but the highlights are as follows:

  1. The amendments do not apply to construction contracts entered into before the commencement of the amending act which came in to force on 21 April 2014.

  2. For any commercial building contract entered into on or after 21 April 2014, it is no longer necessary for the payment claim to be endorsed “This is a payment claim under the Building and Construction Industry Security of Payment Act 1999" for the payment claim to be valid.

  3. For payment claims for work done in connection with an exempt residential building contract (one where the owners who are the principals to the contract intend to reside in the dwelling) the requirement for an endorsement still subsists. The owners are still exempt from claims under the Act by builders who are performing residential building work, but they are exposed to payment claims by architects, surveyors etc. with whom they contract direct and those payment claims need no longer be endorsed. Subcontractors to the builder are able to claim payment from the builder but must still endorse their claims.

  4. When a head contractor makes a payment claim it must now be accompanied by a supporting statement which includes a declaration that all subcontractors, if any have been paid all amounts that have become due and payable in relation to the construction work concerned. Failure by a head contractor to serve a supporting statement with a payment claim, or service of one which is false and misleading, is now a criminal offence. The Regulations provide that where the obligation to pay a subcontractor is disputed that must be referred to in an attachment to the supporting statement.

  5. There are changes to the due dates for payments under s.11 which will need to be taken into consideration when drafting construction contracts. These changes mean that your clients who are principals in commercial building contracts, building contractors, developers, builders, contractors or subcontractors will have to adapt their business practices. This is particularly the case with those who are head contractors as defined by the Act.

Should you require advice or help on these matters please call us on (02) 9689 3992.

Disclaimer: The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.