On 4 December 2014, Mark Secivanovic and Feda Dabbagh from our
Sydney Litigation team and barrister Francois Salama presented an
evening seminar on recent changes in the NSW building and
construction industry, including changes under the Home Building
Amendment Act ("Home Building Act"), and recent changes
to the Building and Construction Security of Payments Act
("Security of Payments Act").
The main changes under the Home Building Act are:
the requirement to pay a 10% deposit for all contracts for
residential building work (even those over $20,000);
structural defects are now classed as "major defects"
and include "major elements of a building"; and
builders can claim a defence where statutory warranties are
breached if they have received instructions from another
Changes to the Security of Payments Act are primarily directed
at promoting timely payment of subcontractors. Mandatory deadlines
for making prompt progress payments have been introduced, and
"principal", "head contractor" and
"subcontractors" have been defined, so that parties may
identify the timeframes applicable to their contract. As part of
the changes, payment claims no longer need to be stated as being
made under the legislation. That means a payment claim, whether or
not in the form prescribed under the contract, can still be the
subject of an adjudication application or court action.
It is now mandatory to serve a payment claim with a supporting
statement and a head contractor can be fined and face imprisonment
for providing a false supporting statement.
The changes should also result in a smoother adjudication
process as new evidence or material cannot be introduced once a
payment schedule has been given. For recipients of a payment claim,
this means a lot more care needs to be taken when providing a
payment schedule in response to the claim.
Changes to the Building and Construction Industry Payments Act
took effect on 15 December 2014. The changes in NSW and Queensland
are immensely different.
By way of example, unlike the NSW amendments, in Queensland it
remains a pre condition to a valid payment claim that it state it
is a payment claim made under the Act. As a result of the recent
Queensland amendments, payment claims are now categorised as
standard or complex payment claims (ie complex being a claim over
$750,000). These new Queensland amendments also resulted in new
timeframes imposed on contracts entered into after 15 December
2014. Different timeframes will now apply for responding to payment
claims and for issuing final payment claims depending on whether
the payment claim is complex. Given the significant differences
between the States, it is highly recommended you seek advice if you
are in this industry.
All members of the building and construction industry should be
aware of these reforms, which will significantly change the process
in building and construction projects and raise a number of issues
of which industry members should be aware. Our teams in Sydney and
Brisbane have extensive knowledge and expertise in the building and
construction industry and are always available to provide
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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