Home » The Building and Construction Industry Security of Payment Act: an outline

The New South Wales government has stepped in to enforce upon players in the building industry a progress payment regime. The Building and Construction Industry Security of Payment Act  1999 (NSW) became law on 5 October 1999 and will take effect shortly, on a date to be announced by the government. The new law will apply not only to builders and subcontractors but also to suppliers to the building industry and even to consultants such as architects, engineers and project managers. It will also apply whether an agreement is written or oral. The new law's major changes include:

• Even if the contract does not provide for progress payments, a four-weekly progress payment arrangement can be imposed.
• This is triggered by the unpaid party delivering to the paying party a payment claim. This must be complied with within 10 days.
• If the person seeking payment does not like the result, an independent adjudicator will decide the result for the parties.
• In the case of a dispute, an unpaid party has certain rights to suspend work.
• "pay when paid" clauses are now ineffective.

While similar legislation has been in place in other jurisdictions for some time, this is the first such imposition in New South Wales. This new law may affect the choice of law to apply to your contract. This is a very brief introduction to the Building & Construction Industry Security of Payment Act  1999 (NSW) and is not intended to be legal advice. This publication cannot be relied on as a substitute for appropriate legal advice suited to your circumstances. Given that this is the case, you should seek and retain the advice of a solicitor if you require a comprehensive and up to date analysis of the law pertaining to your circumstances. November 2000