In an update released at the beginning of September, CDI Lawyers brought to your attention that a number of amendments to the Building Industry Fairness (Security of Payment) Act 2020 (BIF Act) had received proclamation and were set to be rolled out in stages starting from 1 October 2020.
The BIF Act amendments bring a number of changes to Queensland’s statutory adjudication regime and provide additional avenues for contracted parties to recover monies owing. The following provisions are now in force as of today’s date:
- head contractors are required to provide a ‘supporting statement’ with each payment claim to the principal. The supporting statement must declare that all subcontractors have been paid all amounts owed to them at the date of the payment claim or, if they have not been paid the full amount, state the reasons for withholding payment. A failure to provide a supporting statement will incur a maximum penalty of 100 penalty units ($13,345) but will not affect the validity of the payment claim under the Act;
- a head contractor can serve a payment withholding request (‘PWR’) on a financier to withhold unpaid adjudication amounts from payment to the developer. The purpose of the PWR regime is to protect successful claimants to an adjudication from the risk of non-payment by the respondent who may be nearing insolvency;
- a subcontractor can serve a payment withholding request on a developer to withhold monies from payment to the head contractor; and
- a head contractor can register a charge over property of the developer for unpaid adjudication amounts. In circumstances where the respondent to an adjudication application is the registered owner of the property on which the construction work was carried out or to which the related goods and services were supplied, a successful claimant may request that a charge be registered over the relevant property, providing security for payment of the adjudicated amount.
It is important that industry participants and stakeholders are familiar with the new amendments to the BIF Act and properly update their staff and have adequate systems in place to avoid penalties for noncompliance. Most importantly, head contractors must ensure that each payment claim to the principal as of today is accompanied by a valid supporting statement.
CDI Lawyers has an in depth understanding of the requirements under the BIF Act to help participants prepare a valid supporting statement. In light of the potential consequences for preparing an invalid statement, we recommend our clients contact us to ensure that their supporting statements comply with the BIF Act.
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