There have been recent changes to Building and Construction Industry Security of Payment Act 1999.

From 1 March 2021, ‘Owner occupier’ residential construction contracts will be impacted by these changes.

Residential building work done to residential properties where the owner resides in that dwelling or proposes to reside are caught by these.

What are these changes?

A Builder can make a payment claim to the homeowner under the Building and Construction Industry Security of Payment Act 1999  and if the contract has no express provisions of when these payments become due and payable, payment should be made 10 business days after the payment claim was made.

A homeowner may reply (in response to the payment claim) by providing a payment schedule to the Builder within the time allowed in the construction contract or within 10 business days after the payment claim is served (whichever is earlier).

If the Builder is not paid on time, that contractor may suspend the construction work and an interest may be payable on the unpaid amount of that progress payment.

Up until now these laws did not apply to owner occupier construction contracts.

Upcoming changes

From 26 June 2021 all construction contracts with a value of over $20,000 must  contain the Security of Payment Guide. Failure to do this may attract fines of $8,800 for a corporation and $4,400 in any other case.

Previous laws apply to any contracts entered into before 1 March 2021.

Atul Singh (Director) and Daniela Ceccattini (Solicitor) of Adams & Partners, Lawyers are happy to assist in any of your contractual advices, concerns and issues.

Written by Atul Singh.

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