Reform to Security of Payment Legislation

security-of-payment-legislation

Federal Government to review Security of Payment laws. 

Last year the Federal Government commissioned a review of its nationwide Security of Payment laws.  The resulting “Murray Report’ made 86 recommendations including the adoption of a national framework and the extension of the laws to residential building work.

Currently, it is only subcontractors working for a builder on a residential site that can make a claim and only if their progress claims are stated to be made under the Act.

Some of the recommendations will shortly be given legislative force when the Building and Construction Security of Payment Amendment Act 2018 receives assent.

Whilst the legislation has not been extended to apply uniformly to all residential sites the amendments seek to improve the operation of the Act.  There are several key reforms.  Three of interest are set out below.

First, the entitlement to receive a progress claim will no longer be triggered by a reference date.

The entitlement will now arise when work is performed. The amendment aims to prevent payments being delayed by the imposition of a contractual reference date.

Second, all claims must now state that they are made under the Act, returning the regime to that of April 2014.

Third, the maximum payment period reduces from 30 to 20 days, allowing faster cash flows.

Download the March 2019 Newsletter »


Are you having problems with your security of payment?  

Clare Peacock is an experienced construction lawyer working on Sydney’s Northern Beaches. Clare provides practical, cost-effective building approval advice to property owners, builders and strata managers. Services include residential building disputesbody corporate issues and strata building problems.

Call 02 9452 9298  Send an Email  Online Enquiry

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