Skip to main content

Changes to security of payment in Queensland

July 26, 2020

Changes to the Building Industry Fairness (Security of Payment) Act 2017 (‘BIF Act’)

The rapid adjudication process established by the BIF Act has been in effect since December 2018. You can review the current adjudication system by viewing the free HIA webinars on the HIA website (www.hia.com.au) and locate the webinar and course materials under ‘Publications, Webinars, Recorded Webinars, QLD Members only’ 

With the passing of the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill 2020 (‘the Bill’) through parliament, a number of changes will be made to this process.

There is currently no indicative start date for these changes although we would anticipate they would start sometime this year.

Supporting statement

The primary change to the adjudication process is that any head contractor making a payment claim (generally against a developer) must accompany that payment claim with a supporting statement.

The supporting statement must:

  • Declare that all subcontractors have been paid all amounts owed to them; or
  • For amounts in dispute or that have not been paid in full, state:
    • the subcontractor’s name;
    • the amount still unpaid;
    • the details of the unpaid payment claim for the subcontractor;
    • the date the subcontractor carried out the construction work or supplied the related goods and services;
    • the reasons the amount was not paid in full; and
    • that all other subcontractors have been paid the full amount owed to them by the claimant.

Not including a supporting statement will be an offence and could result in a substantial fine of over $14,000. However, a failure to include a supporting statement does not invalidate the payment claim and the claim can proceed to adjudication.  

This requirement will not apply to subcontractors making a payment claim against a head contractor.

Note: HIA members doing domestic building work for resident owners are not subject to this requirement. A payment claim under the BIF Act cannot be brought against a resident owner.

Higher party to withhold payment

Under new provisions a party can issue a payment withholding request on a higher party in the contractual chain. For example, a subcontractor could issue a withholding request to the developer (who is above the builder in the contractual chain), the idea being that instead of paying the builder the developer holds the money owing to the subcontractor.

A party will only be able to issue a payment withholding request if they have first progressed through adjudication and received an adjudicated amount in their favour. If this adjudicated amount remains unpaid then a party can issue a payment withholding request.

It is not available where the contract involves domestic building work and there is resident owner.

Charge on land

The legislation clarifies that a statutory charge may only be imposed by a head contractor for non-payment by the person they contracted with, the respondent (for example a developer).

A charge can only be registered where the adjudication decision has been made requiring payment and the amount owed has not been paid. In order to register the charge, the adjudication certificate must be filed as a judgement debt in a court.

It is not available where the contract involves domestic building work and there is resident owner.

The exact timing of when the above provisions will commence is not known at this stage.  HIA will be producing a range of information sheets about these over the coming months.

Contact a HIA Workplace Adviser

1300 650 620

or email enquiry@hia.com.au