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Changes to the NSW Security of Payment scheme commenced yesterday

Just a quick reminder to everyone doing construction work, or supplying related goods and services in New South Wales, amendments to the Building and Construction Industry Security of Payment Act 1999 (NSW) (BCISOPA) commenced yesterday, 21 October 2019.

The key changes the NSW regime as a result of these amendments are:

  • There are no longer ‘reference dates’ as this concept has been removed from the BCISOPA, so that generally a claimant is entitled to a progress payment on a monthly basis, on and from the last day of each month, unless the construction contract allows for an earlier date.
  •  An endorsement has been added back as a requirement for a valid payment claim, so a valid payment claim must say:
    • “This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW).”
  •  A claimant can now serve a payment claim on or after the date of the termination of a construction contract, and its right to do so cannot be excluded by the terms of the contract.
  •  The time to make a progress payment to subcontractors has been reduced from 30 business days to 20 business days after the subcontract makes payment claim.
  •  Adjudication applications can now be withdrawn by the claimant in two circumstances:
    • where it has been lodged but an adjudicator has not yet been appointed; or
    • after an adjudicator has been appointed but before the determination of the application, providing the respondent does not object to the withdrawal.
  •  The Supreme Court of NSW can now set aside part of an adjudicator’s decision (instead of only the whole decision).
  •  Penalties for breaches of section 13(7) and (8) of the BCISOPA in relation to supporting statements have been increased to 1,000 penalty units for a corporation and 200 penalty units for an individual.

The Building and Construction Industry Security of Payment Amendment Regulation 2019 (NSW) (Regulations) also commenced yesterday.  A key reform as a result of the Regulations is that owner occupier construction contracts are excluded as a class of construction contract from the regime and offences and the related penalties have now been specified.

If you have any concerns about how the amendments to BCISOPA may affect you, or your options for recovering payment under BCISOPA for constructions work and the supply of related goods and services in New South Wales, feel free to contact us to get in touch.

The content of this blog article is intended to provide general information as a summary of the subject matter, which is current at the time of publication. It is intended for information purposes only and should not be regarded as advice. Specialist advice should be obtained about your specific circumstances before taking action on any issue dealt with in this publication.