Security of payment reforms have serious implications for building and construction industry

Upcoming changes to legislation within the Queensland building and construction industry will have serious implications to developers, builders, sub-contractors and suppliers, if not properly understood.

Brendan Bathersby, Partner at Garland Waddington, Maroochydore, warns that significant penalties, including jail time, could be imposed for failure to comply with the new legislation.

“These changes are complex and the penalties for non-compliance are serious. It’s imperative that builders, subcontractors and suppliers get advice to understand the new legislation and safeguard their business,” Mr Bathersby said.

Due to enactment of the Building Industry Fairness (Security of Payment) Act 2017 (the BIF Act), the new Projects Bank Accounts (PBA) regime applies to all tenders for Government work between $1 million and $10 million after 1 March 2018. This regime provides trust accounts to receive progress payments from the Principal and retention funds and disputed monies, for the benefit of first-tier subcontractors.

In addition, from 1 July 2018, Chapter 3 and 4 of the BIF Act will replace two long standing pieces of legislation: the Building and Construction Industry Payments Act 2004 and the Subcontractors Charges Act 1974.

Broadly speaking, these changes relate to security of payment legislation and increase Queensland Building and Construction Commission (QBCC) oversight of financial affairs.

“Chapter 3 and 4 of the BIF Act are far more important than Project Bank Accounts regime.  They will affect the whole of the building and construction industry in Queensland immediately on 1 July 2018” Mr Bathersby said.

Breaches of the legislation can result in disciplinary action by the QBCC and serious penalties such as significant fines and even jail time for certain breaches.

“We are greatly concerned that many participants in the building and construction industry, and their advisors, think that the changes to the BIF Act are limited to Project Bank Accounts and/or Government work between $1 million and $10 million”.

“In fact, the most significant changes are in relation to payment claims, set out in Chapter 3. The new requirements apply to all contracts and are far more wide reaching than just applying to Government tenders. Businesses need to ensure that they have processes in place to be BIF-ready and BIF-compliant.”

“Whether you are a builder, a sub-contractor or a supplier to the industry, you need to understand how the changes will impact your business,” Mr Bathersby said.

To find out more about the legislation and its impacts, contact Brendan Bathersby on (07) 5443 4866 or email




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