New subcontractor protection laws now in place

New laws that will ensure subcontractors and suppliers receive timely payments for their work came into effect on Monday, August 1.

The Building and Construction Industry (Security of Payment) Act 2021 applies to construction contracts entered into from that date. The Construction Contracts (Former Provisions) Act 2004 will continue to apply to existing contracts.

The first stage of the new Act expands contractors’ rights to claim regular payments to avoid large outstanding invoices.

It also delivers more structure and transparency to payments and an effective dispute resolution pathway to recover money owed. This aligns WA’s security of payment laws with related legislation elsewhere in Australia.

Education initiatives are underway to help the industry adjust to the new legislation, including a suite of resources at the Building and Energy website and forthcoming information sessions and regional roadshows.

Further security of payment reforms will start from February 2023 and February 2024. These stages will include a mandatory retention trust scheme, fairer contracting practices and expanded powers against unscrupulous registered builders.

Commerce Minister Roger Cook said the recent surge in building and construction activity across Western Australia had reinforced the industry’s pivotal place in the State’s economy.

The law would ensure greater payment protections across the contracting chain in the event of an upstream insolvency.

“I encourage all industry participants to learn more about the new laws, which will deliver sector-wide benefits through a fairer, more efficient and robust payment protection system,” Cook said.

Do you have a legal matter that requires our help? Get in touch on (08) 9365 7746 or via BusinessLawWA@cciwa.com.

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