Several key amendments to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (‘Act’) have been released by the Queensland Government that will impact on NECA members in QLD. A number of changes will come into operation on 1 October 2020 concerning new offences that are now subject to penalties, supporting statements for payment claims and payment of adjudicated amounts and payment withholding requests.
Supporting Statements for Payment Claims
Head Contractors who engage subcontractors will now be required under the Act to lodge a supporting statement from 1 October 2020. Failure to provide a supporting statement does not affect the validity of the payment claim, but is subject to a maximum fine of $13,345.00. There is no prescribed form in the Act for supporting statements, but section 75(6) provides that a supporting statement is a written document declaring that all subcontractors have been paid all amounts owing to them by the claimant at the date of the payment claim or if a subcontractor has not been paid the full amount owed to them then the Head Contractor must also declare the following:
- the name of the unpaid subcontractor;
- the amount still unpaid;
- details of the unpaid payment claim for the subcontractor;
- the date the subcontractor carried out the construction work;
- the reasons why the amount was not paid in full.
It is important to note that the requirement to provide a supporting statement does not apply to subcontractors who engage other subcontractors.
Penalties for failing to pay Scheduled Amount
Where parties issue a payment schedule, they must pay the scheduled amount by the due date. Failure to pay the full amount is now subject to a maximum penalty of $13,345.00.
Penalties for failing to pay Adjudicated Amount
A respondent must pay the adjudicated amount to the claimant within 5 business days of receiving the adjudicator’s decision.
From 1 October 2020, failure to pay an adjudicated amount within 5 business days of receiving the adjudicator’s decision will result in a maximum fine of $26,690.00.
Further, a respondent must notify the QBCC Adjudication Registrar in the prescribed form (that may be downloaded from the QBCC website) within 5 days of making payment that they have paid the adjudicated amount and provide the Registrar with evidence that the payment has been made. Failure to do so is subject to a maximum penalty of $2,669.00.
In accordance with the amendments of the Act, any claimant who intends to withdraw their adjudication application must notify the registrar as soon as practicable. If the claimant fails to do so, they may be liable for a maximum fine of $2,669.00.
Payment withholding requests
The amendment to the Act to provide for payment withholding requests is a welcome change that will bring QLD in line with similar security of payment legislation provisions in other states.
If the respondent fails to pay the adjudicated amount by the due date, the claimant may now serve a payment withholding request in the approved form on the head contractor, principal or financier. The claimant must also provide a copy of the request to the respondent.
Charge over property
The Act also now provides an entitlement to register a charge in the approved form over the land on which works were undertaken, provided that the respondent owns the land.
The team at CTI Lawyers are familiar with the changes to the Act and experienced in dealing with construction disputes under the Act. Contact us today on 1300 361 099 for further information and assistance.
This summary is a guide only and is not legal advice. For more information on legislative obligations, please call CTI Lawyers on 02 9021 9699 or email [email protected]