Primarily directed at promoting timely payment of subcontractors, recent amendments will have broader implications for industry players.
Solicitors acting for principals and head contractors should be aware that changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) have the potential to make preparation of payment schedules considerably more onerous for their clients.
Ensuring adequate administrative processes are in place to prepare the supporting statements required by the new legislation, and more importantly to verify their accuracy, will be a priority once the amendments commence.
The Building and Construction Industry Security of Payment Amendment Act 2013 (NSW)(Amendment Act) is expected to commence in April 2014 and will apply to construction contracts executed after its commencement.
The key changes to the SOP Act are:removal of the requirement to endorse a payment claim as being made under the SOP Act;introduction of a requirement that a payment claim be accompanied by a supporting statement to the effect that all subcontractors have already been paid amounts due to them;introduction of mandatory deadlines for making progress payments; andprovision for the making of regulations requiring retention money to be held in a trust account.