The top 3 reasons why you need to know about the new law changes
What will security of payment and the new Building Industry Fairness (Security of Payment) Act 2017 (‘BIF’) really mean for the humble landscaper?
You may have attempted to avoid or ignore security of payment previously, but this time the legislation is a heavy hitter and has the potential to affect every member of the construction industry.
So rather than be knocked out by the changes, it is time to put on your boxing gloves and get into some training.
Here are the top three reasons you need to know about the law changes that start on 1 July 2018.
Your invoice could be a payment claim
You may recall that under the current security of payment legislation[1] you need to state three items[2] including the special words “this is a payment claim in accordance with the Building and Construction Industry Payments Act 2004”[3] for a payment claim to be valid.
Without those special words, a payment claim is currently not valid and the security of payment protections and the strict time frames for enforcement are not triggered.
But, under BIF, there is no requirement to state those special words. The new legislation states that a payment claim is a written document that:
“(a) identifies the construction work or related goods and services to which the progress payment relates; and (b) states the amount (the claimed amount) of the progress payment that the claimant claims is payable by the respondent; and (c) requests payment of the claimed amount; and (d) includes the other information prescribed by regulation.”[4]
To comply with the “requests payment of the claimed amount”, the Act further states that if the written document states the word ‘invoice’[5], it fulfils the requirement of being a request for payment.
That means that your simple invoice can potentially be a valid payment claim under BIF.
Paying for supplies
If your simple invoice can now be a payment claim under BIF, it also means that your suppliers’ and your subcontractors’ invoices are also payment claims.
There will no longer be any notice that you are receiving a payment claim. As a result, any invoice for construction work or related goods and services should be treated as a payment claim under BIF.
This is potentially the biggest effect on the industry and it affects trade contractors who solely do domestic work too because they buy supplies and have subcontractors too.
In addition, the law relating to payment schedules and payment is also changing under BIF. Payment schedules are now compulsory and at worst can incur not only liability for the full amount claimed, but potentially 100 QBCC penalty points.[6]
You cannot rely on your previous knowledge of security of payment
If you think you know a thing or two about security of payment, think again! BIF affects:
Payment claims;
Payment schedules;
Time periods for responding; and
Adjudication.
There are new warning notices, response times and QBCC infringements.
This is security of payment, but not like we in the Queensland construction industry have ever known it.
So don’t get knocked out by someone who knows the new BIF Act better than you do. Learn about this Act like your business depends on it. Want to learn more? Landscape Queensland will be providing training sessions for its members this May 2018. Aitchison Reid Building and Construction Lawyers is there to help by leading a selection of these training sessions for Landscape Queensland’s members.
Contact Us
The law can be complicated, so let our experienced construction law practice give you peace of mind. Call us on 07 3128 0120 or email us at subcontractors@arbuildinglaw.com.au.
End Notes
[1] Building and Construction Industry Payments Act 2004
[2] The other two things are stating the claimed amount and identifying the construction work or related goods and services in which the progress claim relates.
[3] or words to that affect
[4] Section 68(1) Building Industry Fairness (Security of Payment) Act 2017
[5] Section 68(3) Building Industry Fairness (Security of Payment) Act 2017
[6] Section 76(1) Building Industry Fairness (Security of Payment) Act 2017
