We previously provided an update on amendments to Queensland’s security of payment legislation under the Building Industry Fairness (Security of Payment) and Other Legislation Amendments Act 2020 (Amendments Act). A number of those key amendments have now received proclamation and are set to be rolled out in stages starting from
1 October 2020.
Most significantly are the confirmed commencements dates regarding “Project Trust Accounts” (previously called project bank accounts), which are the trust accounts that all payments from the principal to the head contractor must be paid into, with subcontractors being the primary beneficiary for the monies held. Trust accounts can only be held with a financial institution that has entered into an agreement with the QBCC.
The key amendment dates are as follows:
Project Trust Accounts
From 1 March 2021: the formerly called project bank accounts now called ‘project trust account’ will need to be established for amounts payable to head contractors and subcontractors in relation to projects where:
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- the contracting party (i.e. the party to the contract for whom the contracted work is to be carried out) is the State, the contract price is $1 million or more, but not more than $10 million, and more than 50% of the contract price is for “project trust work” (e.g. erection and construction of a building, earthmoving etc); or
- the contracting party is a “State authority” (e.g. a corporation owned by the State) that has “decided a project trust is to be established for the contract”, the contract price is $1 million or more and more than 50% of the contract price is for “project trust work”.
From 1 July 2021: the project trust account requirements will extend to projects where the contracting party is a hospital and health service and the contract price is $1 million or more.
From 1 January 2022: the project trust account requirements will be extended to the private sector and local government, with the requirements applying to contracts where:
- the contracting party is “a state authority, a local government, an individual, a private entity”;
- more than 50% of the contract price is for “project trust work”; and
- the contract price is $10 million or more.
From 1 July 2022: the $10 million or more restriction for the private sector and local government will be reduced and the project trust account requirements will apply if those contracts have a contract price of $3 million or more.
From 1 January 2023: project trust account requirements will apply to all contracts where more than 50% of the contract price is for project trust work and the contract price is $1 million or more.
Other BIF Act Amendments
From 1 October 2020:
- the Building Industry Fairness (Security of Payment) Act 2017(BIF Act) will be amended to introduce additional avenues for contracted parties to recover monies owing, including the ability for:
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- a head contractor to register a charge over property of the developer for unpaid adjudication amounts;
- a head contractor to serve a payment withholding request (PWR) on a financier to withhold monies from payment to the developer; and
- a subcontractor to serve a PWR on a developer to withhold monies from payment to the head contractor;
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- the Queensland Building and Construction Commission Act 1991 (QBCC Act) will be amended to allow the QBCC to place new conditions on licences granted under the QBCC Act, restricting the scope of work that a licensee may perform to be commensurate with the licensee’s skills and experience, with the view these conditions will better support a licensee’s transition into a new licence class; and
- the Building Act 1975 will be amended to provide further obligations on private certifiers to strengthen the independence within the industry and to ensure that individual’s continue act in the public’s best interests;
From 1 March 2021: the Architects Act 2002 and the Professional Engineers Act 2002 will be amended to include new disciplinary procedures and investigative powers aimed at promoting public safety by ensuring that architectural and professional engineering services are only provided by qualified, registered practitioners.
Takeaway
With the commencement date for a number of these provisions now less than a month away, industry participants are strongly encouraged to become familiar with the impending changes.
CDI Lawyers will keep you up to date with any further announcements regarding the Amendments Act as and when they become available.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader’s specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
Key contacts:
