NSW Security of Payment Amendment Bill passes Parliament23 November 2018
The Building and Construction Industry Security of Payment Amendment Bill 2018 passed Parliament on 21 November 2018. The Bill passed in a form broadly consistent with the consultation draft as summarised in our update on 29 August 2018, however the following changes from those identified in our update were made:
- the due date for payment of progress payments by principals to head contractors will remain at 15 business days from the payment claim, rather than being shortened to 10 business days (the due date for payments to subcontractors being shortened from 30 business days to 20 business days)
- removal of the concept of the entitlement to claim arising on a ‘reference date’ (the consultation draft retained it but made it monthly other than for one-off or milestone payments), with the entitlement now being monthly for all progress payments, and
- removal of the current exemption for residential building work for a person who intends to reside in the premises, however the Minister’s second reading speech in the Legislative Assembly states this exemption will be preserved by being moved to the regulations and alludes to its possible removal in the future.
The changes made by the Bill as passed will only apply to contracts entered into from the date the amendments take effect (unless the regulations provide otherwise). We will keep you informed about when this is to occur. If you would like to discuss the amendments in more detail or require assistance in understanding the operation of the Security of Payment Act, please get in touch.