In November 2018, the Building and Construction Industry Security of Payment Amendment Act 2018 (Amendment Act) was passed, introducing significant reforms to the Security of Payment Act 1999 (NSW) (SOP Act) – our outline of the key reforms and implications for the construction industry in an earlier article is here.  Now some six months after assent, the Amendment Act is yet to commence. 

This week, to facilitate commencement of the reforms, the NSW Government released an exposure draft amending the Building and Construction Industry Security of Payment Regulation 2008 for public consultation.

The reforms to the Regulation:

  1. Exempt owner-occupier construction contracts from the operation of the SOP Act: It will be recalled that the Amendment Act removed the pre-existing owner-occupier exception from the SOP Act.  
  2. Additional prescribe offences under the Regulation to which executive liability will apply: Contraventions of sections 13(7) and (8) (relating to the giving of Supporting Statements and false Supporting Statements) are executive liability offences under the Amendment Act. The reforms add to this list offences relating to retention money trust accounts, including matters such as a head contractor illegitimately withdrawing from a trust account or failing to, hold retention money on trust; notify of overdrawn or closed accounts; retain account records or provide information.  
  3. Prescribe the offences under the SOP Act and Regulation for which penalty notices may be issued and the amount of the penalty payable: Schedule 3 contain a list of offences under the SOP Act for which a penalty notice may be issued.These include failures to attach a supporting statement to a payment claim; notify of changed circumstances; serve a copy of an adjudicator's determination; give notice of withdrawal of an adjudication application; provide the principal contractor's identity and contact details; and retention money trust assets.

The consultation period closes mid-June. It is anticipated that the amending Regulation will be published mid-year, with the Amendment Act and amending Regulation proposed to commence three months thereafter (which will be around October 2019).