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Changes in Payments for Building and Construction

Watkins Tapsell Buliding & Construction Law

hanges to the Building and Construction Industry Security of Payments Act were passed by the NSW Parliament in November. We are just waiting for confirmation of the start date for the changes.

The Act and these changes do not apply to construction contracts for the carrying out of residential building work where the person you are doing the work for resides in or proposes to reside in the property where you are doing the work. For example you cannot rely on the Act when you are doing work for a homeowner or a developer who intends to reside in the property.

Three changes you need to make

1. Invoice wording

To get the benefit of the Act to date you have had to put wording on your invoices that said something like “this is a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW)”. As soon as the changes start you won’t have to put the wording on your invoice.

2. Supporting Statements

As soon as the changes start, Head Contractors, when making a claim on a Principal, need to give a declaration that subcontractors have been paid what is due and payable.

This has previously been provided for in contracts but now penalties of up to $22,000 and/or 3 months imprisonment may be imposed if the declaration is false or misleading.

3. Times for payment
Up until the changes, the time for payment has been that if the contract does not provide a date for payment then payment is to be made within 10 business days of a payment claim.

As soon as the changes start if it is a payment being made by a Principal to a Head Contractor it is to be made within 15 business days or an earlier date set out in the contract. If it is a payment being made to a subcontractor it is to be made within 30 business days or an earlier date set out in the contract.

What should you do now?
If you believe the changes apply to you then now is a good time to review your contracts and terms and conditions to make sure that you will be paid on time.

How Watkins Tapsell can help
We have specialists in all key areas of Commercial Business who are experienced in the Property and Construction sector. So if you are unsure of how these changes might affect you make sure you contact our Commercial Business team.

If you require assistance with a business dispute, and want a recommendation and a cost estimate on the best method to use to reach a resolution, please contact the Commercial Litigation Team. We have extensive experience in resolving business disputes with and without litigation.