CTI LAWYERS UPDATE – THE SECURITY OF PAYMENT AMENDMENT ACT COMMENCED ON 21 APRIL 2014 AND AFFECTS ALL CONTRACTS ENTERED INTO AFTER 21 APRIL 2014
The amendments to the Building and Construction Industry Security of Payment Amendment Act 2013 (“the Act”) commenced on 21 April 2014 and will apply to all contracts entered into from 21 April 2014.
The only reforms that have come into effect as at 21 April 2014 that apply to all construction contracts (except residential) entered into ON or AFTER 21 April 2014 are as follows:
- Maximum payment terms.
- These Contracts must provide for payment terms of no more than 15 business days for payments to Head Contractors and 30 business days for payments to Subcontractors (see sections 11 (1A) and (1B) of the Act).
- A payment claim will no longer need to include an endorsement that it is made under the Act (except residential).
If you are a Subcontractor and have subcontracted others to do works on your behalf you must make payment to your Subcontractor within 30 business days, unless the Contract between you and your Subcontractor specifies a lesser period for payment.
The following remaining reforms will only come into effect when regulations are made:
- Payment claims made by a Head Contractor include a supporting statement declaring that all subcontractors have been paid what is due and payable
- Head contractors deposit any retention money withheld from subcontractors into a trust fund.
Our Solicitors at CTI Lawyers will be able to assist you and your team in complying with the new provisions of the Act. You can contact CTI Lawyers on (02) 9744 1099 or email your enquiry to [email protected].