Watch this space: major reforms to construction legislation may be on the way

WHO SHOULD READ THIS

• All participants in the Queensland construction industry.

THINGS YOU NEED TO KNOW

• The Queensland Government is proposing major reforms to a wide range of legislation which regulates the industry, including the security of payment regime and the Queensland Building and Construction Commission Act 1991 (Qld).

WHAT YOU NEED TO DO

• Watch this space for further developments and consider how your business may be affected.

On Tuesday, the Queensland Government introduced a Bill which, if enacted, will significantly change the way in which Queensland construction projects are undertaken.

The Building Industry Fairness (Security of Payment) Bill 2017 (Bill) follows a consultation process with the Queensland construction industry, which included the release of the Queensland Building Plan and submissions from the industry on proposed reforms.

The Bill proposes sweeping changes to existing construction legislation in Queensland. It repeals both the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) and the Subcontractors’ Charges Act 1974 (Qld), and also contains amendments to the Building Act 1975 (Qld), the Plumbing and Drainage Act 2002 (Qld), and the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).

Key features of the Bill include:

• Penalties. The introduction of penalties (including fines and possible imprisonment) for various offences, including the performance of unlicensed building work.
• Project Bank Accounts. The introduction of Project Bank Accounts (PBAs) on certain building projects. The failure to establish PBAs on certain projects or administer them correctly may constitute an offence.
• Payment claims. The removal of the requirement to endorse payment claims under the new legislation (as currently required under BCIPA), which means that all claims will need to be treated as statutory payment claims and responded to as such.
• Payment schedules. Unless there is a reasonable excuse, the failure to respond to a payment claim with a payment schedule attracts a penalty and is a ground for disciplinary action under the QBCC Act. It also renders the respondent liable to pay the full amount of the claim.
• Adjudication procedures. Different timeframes may govern the adjudication process. Respondents will no longer be able to raise new reasons for withholding payment in an adjudication response (regardless of the amount in dispute).
• Adjudicated amounts. The failure by a respondent to pay an adjudicated amount by the due date may attract a penalty and disciplinary action under the QBCC Act.
• Phoenix activity. Various amendments are aimed at preventing ‘phoenix’ activity, including strengthened provisions to exclude individuals from holding QBCC licences.
• Security and retention. There are proposed provisions to regulate retention amounts.

We will be discussing these and other topical construction law issues at our upcoming 17th Annual Construction Law Conference in Brisbane on 14 September 2017. To register to attend, please click here.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.