The Building and Construction Industry Security of Payment Act secures payment for subcontractors. The government introduced the legislation to ensure the “little guy” is protected and is rightfully paid progress payments for work delivered.

If you are entering into a contract for residential work as a Head Contractor, Subcontractor, or a Supplier, then the Building and Construction Industry Security of Payment Act 1999 (NSW) affects you.

This legislation sets strict and short time frames for making payment claims under the contract, and imposes large liabilities on each person that is a party to one of these contracts. It sets strict timeframes by which the Head Contractor must be paid by the principle, and pay same to a Subcontractor, provide payment schedules, provide responses to payment schedules, and attend adjudications.

This legislation has changed the way that building contracts operate and how each person in the chain gets paid.

There are strict time frames on when a subcontractor should lodge a claim and, if required, apply for adjudication with the Head Contractor / Principal for unpaid invoices.

For a Principal or Head Contractor, it is important to be aware of their obligations to pay a subcontractor and what, by law, can be withheld.

For a Subcontractor, it is important to be aware of the time frames otherwise you won’t have the benefit of the act and its quick decision and payment system.