The NSW Government, by proclamation of the Governor, has appointed 21 April 2014 (Easter Monday) as the date of commencement for changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) (“SOPA”), apart from the establishment of trust accounts for retention funds as there is no indication when the regulations dealing with that issue will be introduced.

These changes were enacted as the Building and Construction Industry Security of Payment Amendment Act 2013 (NSW) late last year.  Our summary of the changes can be viewed here .

For contracts entered into after Monday 21 April 2014, parties in the building and construction industry should take note of the following key changes:

  • removal of the requirement for an “endorsement” on payment claims (non-residential);
  • prompt payment timelines; and
  • head contractors are now required to provide a supporting statement, backed up with heavy fines and imprisonment penalties for non-compliance.

The NSW Government has also amended the Building and Construction Industry Security of Payment Regulation 2008 (NSW) to prescribe the form for the supporting statements that will now be required of head contractors.  The amendment: Building and Construction Industry Security of Payment Amendment (Supporting Statement) Regulation2014 (NSW), published 11 April 2014 (2014 No 185) can be accessed through the NSW Government website.

All parties in the NSW building and construction industry should be aware that the changes to SOPA are perhaps the most significant since these laws were introduced in 1999.  There are a number of subtle but important issues with the changes to SOPA that could catch unprepared parties.  Further, strict time limits and even criminal penalties may now apply.