More Paperwork for the Construction Industry

On 20 November 2013, the Building and Construction Industry Security of Payment Bill 2013 (NSW) was given royal ascent. The new laws make substantial changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the “ACT”).

This article will discuss the most notable ways in which your business has been affected by these legislative changes, namely;

• changes to the way progress claims are made;
• due dates for payments of progress claims; and
• the requirements of supporting statements from head builders.

Claim Changes

Previously a payment claim was to be made in accordance with s 13 of the Act. There, it was required that you: detail the type of work carried out; the amount claimed; and include a statement that the claim was made in accordance with the Act.

The Act now provides that any payment claim for any work carried out on a construction contract, regardless of form, is deemed a payment claim under the Act (unless the claim is for work done on residential property).

Change in payment dates

Previously, payments of a payment claim were to be made within 10 business days of the payment claim being made, pursuant to s 14of the Act. However, the new law splits the maximum payment time as follows:

• a payment to a sub-contractor from a head contractor is payable within 30 business days from the date of the payment claim, or, earlier if stipulated in the contract; and
• a payment to the head contractors from the principal is payable within 15 business days of the demand being made, or, earlier if stipulated in the contract.

Sworn Statements

Finally, the head contractor is now required to attach a sworn statement that states they have paid their contractors what is payable, before they can make a valid claim to the principal for a progress payment. If it is found that the sworn statement contains false statements, penalties of up to 200 penalty units ($22,000.00) and/or three (3) months in prison may apply. There is also a provision for the establishment of a statutory body to investigate the truth of these statements.

Tips:

• Make sure you keep your staff payments up to date.
• Stay on top of your administrative tasks.
• Treat all claims as if they are made under the Act.

Feel free to contact us for a free consultation on (02) 9262 5495 or (03) 8899 7870; visit our Website; Like our Facebook Page; or join our Building and Construction Mailing List.

This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.