Security Of Payment Act NSW Has Changed
As of 21 October 2019, building and construction contracts entered into will be subject to the most recent amendments to the Building & Construction Industry Security Of Payment Act 1999.
The significance of the changes for claimants is worth noting carefully.
The changes to the Building & Construction Industry Security Of Payment Act 1999 legislation have simplified reference dates. Reference dates are the time that a claimant is allowed to make a claim under the Security of Payment Act NSW. A claimant is now assured of at least one reference date per month and it is than last day of the month unless a particular date is stated in a contract.
No longer can a Claimant be deprived of making a claim under the Building & Construction Industry Security Of Payment Act 1999 legislation when a contract has been terminated.
However it is of the utmost importance to not that there is only one opportunity to do so after termination so it is crucial to ensure that the claim is well prepared, valid, and properly served. For help with this we direct you to our Security Of Payment Act NSW Specialists via our Online Claim Form.
The next most important change for Claimants is the reduction of the time allowed for Respondents to pay a payment claim served under the Building & Construction Industry Security Of Payment Act 1999 legislation. If the contract between the parties makes no express provision, or overly long payment terms, than the maximum time now allowed for payment under the Security Of Payment act NSW is 20 business days from the date that the payment claim was properly served on the respondent.
There has also been changes to how head contractors must manage monies held in trust under the Building & Construction Industry Security Of Payment Act 1999 legislation that provide further protection for claimants and add increased penalties for directors of head cantor companies who fail to meet their obligations under the Security Of Payment Act NSW.
Changes have also been made to allow claimants to withdraw adjudication applications when it is in their best. interests to do so.
Building & Construction Contracts - Liquidated Damages
Liquidated damages are the often the biggest issue to catch sub-contractors by surprise.
Sub-contractors will invariably sign a building & construction contract that has a “time for completion” clause clearly identified in the contract, and a “liquidated damages” clause also clearly identified in the contract.
A person referred to in section 8 (1) who is or who claims to be entitled to a progress payment (the
“claimant” ) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment.
On and from each reference date under a construction contract, a person: who has undertaken to carry out construction work under the contract, or who has undertaken to supply related goods and services under the contract, is entitled to a progress payment.
Under the Security Of Payments Act a “construction contract” means a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party.
Security Of Payments Act NSW 2013 Amendments
Security Of Payments Act NSW changes passed through the NSW Parliament in October 2013.
The three amendments are:
the introduction of maximum payment terms for progress payments, ie: 15 business days and 30 business days;
the requirement that when payment claims are made by a contractor they must include a supporting statement that declares that all subcontractors have been paid what is due and payable to them at the time of making the claim; and
that an invoice will no longer need to have the endorsement that it is being made under the Act to be a valid payment claim.
Security Of Payments Act NSW
The Building & Construction Industry Security Of Payments Act 1999 is the New South Wales Legislation which enables contractors, subcontractors, consultants and suppliers who have completed construction work and or supplied related goods and services to press for their entitlements under the Construction Contract.