Construction industry participants need to be aware of the recent amendments to the Building and Construction Industry Security of Payment Act 1999 (NSW) that take effect from Monday 21 April 2014.
For contracts that are entered into from Monday and onwards:
- Contractors will no longer be required to include the words “This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999(NSW)” when making payment claims under the Act. Parties receiving progress claims from contractors will need to be vigilant in responding to each claim within time and with particularity sufficient to satisfy the requirements of payment schedules under the Act.
- 'Head contractors' (as defined by the amendments) will have to provide 'supporting statements' with their payment claims, confirming on oath that their subcontractors have been paid. Subcontractors will not have any such obligation. Principals and head contractors alike will need to have effective administrative systems in place to identify progress claims made by subcontractors as and when they are made.
- The payment timeframe provisions have been amended as follows: 15 days for payments to head contractors; and 30 days for payments to subcontractors. Contractual provisions which are inconsistent with the statutory provisions have no effect.
- The amendments do not apply to contracts entered into before the amendments take effect. The existing terms of the Payments Act will continue to apply for such contracts.