Towards the end of 2017 the Queensland Government made some important changes to building laws in the wake a number of high profile builders “going belly up” and leaving their subcontractors unpaid.
The Building Industry Fairness (Security of Payment) Bill 2017 (BIFA) aims to improve security of payments for subcontractors in the building and construction industry by providing for the establishment of project bank accounts (PBA’s), simplifying the law relating to making a subcontractors charge and making access to security of payment easier. These changes have been given effect by amendments to the Queensland Building and Construction Commission Act (QBCCA). BIFA abolishes the existing Building and Construction Industry Payments Act 2004 (BCIPA) and the Subcontractors Charges Act 1974 (SCA) and incorporates their provisions into the QBCCA with significant amendments.
While there have been some trials of PBA’s interstate, Queensland is phasing them in. From 1 March 2018 they are required for government contracts between $1 million and $10 million. However on a date to be determined, but likely to be 1 March 2019, PBA’s will extend to all building and construction contracts from $1 million.
PBA’s are trust accounts where progress payments and retentions are held. A head contractor is required to pay payments from the owner into the PBA. Payments are made to subcontractors when they are due. The head contractor can only draw money from the PBA after all subcontractors’ claims that are due have been paid. Fines and imprisonment are penalties are imposed for breaches of the law.
Some of the changes to BCIPA are:
- The removal of the requirement to endorse a claim that is a claim made under BCIPA. A claim will be sufficient if it identifies the work done and states the amount of the progress payment being sought.
- A change in the times for responses to claims;
- If there is no payment or response served within time a claimant can proceed straight to adjudication. Further the failure to serve a response will give rise to a penalty as well as grounds for disciplinary action against the respondent by the QBCC.
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