Changes to NSW Security of Payment Regulation29 January 2021
The NSW Government has reversed the removal of the requirement for head contractors to report on retention money trust accounts for the 2019/20 financial year and introduced a Code of Practice for Authorised Nominating Authorities.
Retention money trust account reporting for 2019/20 financial year
In December an amendment was made to the Building and Construction Industry Security of Payment Regulation 2020 (NSW) (Regulation) reinstating the requirement for a head contractor to provide an account review report and, in the form approved by the Commissioner for Fair Trading, a retention money trust account statement for a retention money trust account operated during the 2019/20 financial year. The documents must be provided to Fair Trading by 11 June 2021.
Code of Practice for Authorised Nominating Authorities
The Building and Construction Industry Security of Payment Authorised Nominating Authorities (Code of Practice) Order 2020 (NSW) (Code) commenced on 1 January 2021. It was made under s 28A of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act), which grants the relevant Minister the power to make a code of practice applying to the activities of Authorised Nominating Authorities (ANAs) under the Act. Failure by an ANA to comply with the Code is an offence, attracting a maximum penalty of 50 penalty units (currently $5,500). The Minister may also withdraw an ANA’s ability to nominate adjudicators if the Minister is satisfied that the ANA has contravened a provision of the Code. A copy of the Code can be found here.
Reminder regarding removal of owner occupier construction contract exemption
As previously advised, the exemption of owner occupier construction contracts from the operation of the Act, including in relation to payment withholding requests, will be removed with effect from 1 March 2021. An owner occupier construction contract is a construction contract for the carrying out of residential building work on premises that the party for whom the work is carried out resides or proposes to reside in. The mandatory maximum time period for payment in relation to claims under the Act will not apply to owner occupier construction contracts, with the payment period being able to be specified in the contract (with 10 business days for payment after receipt of the claim applying in the absence of any contractual provision).