By Peter Waller – Special Counsel – QLS Accredited Specialist – Commercial Litigation
The Queensland Government has recently announced that it will be extending the commencement date of the implementation of the new Project Trust Account Model for eligible contracts for up to two years.
The extension will be for contracts with a value between $3 million and $10 million, and it will be extended to 1 March 2025. For contracts with a value over $1 million, the extension will be until 1 October 2025. The Government announced over the weekend this extension is in response to the need for suitable software solutions for smaller builders.
You can find out more about the Project Trust Account Model here and here. The new model was introduced under the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (BIFOLA). The Act is designed to improve security of payment for contractors and subcontractors working in the building and construction industry. Among the changes that will be introduced by the Act is the implementation of Project Trust Accounts, which are designed to provide greater security for subcontractors by ringfencing progress payments and protecting them in the event of insolvency.
The Government stated:
These frameworks are all designed to strengthen security of payments to tradies, ensure safe workplaces, and quality construction for consumers right across Queensland’s building and construction industry.
In recognition of the need to balance continued protections for tradies with a suitable software solution for smaller builders feeling the strain of an at-capacity industry, the Queensland Government has extended the commencement
of the remaining phases of the PTA framework.
Starting now, a Steering Committee will engage a specialist to work with software providers to ensure a reasonably priced, and fit-for-purpose, solution is available to make compliance straightforward, especially for smaller companies.
By extending the date by which the new regulations will come into effect, subcontractors will have more time to prepare and ensure that they are able to access the protections that will be provided by the Act.
While the extension will give builders and contractors more time to prepare for the new regulations and ensure that they are compliant with the changes that will be introduced under the Act, it will also delay the implementation of the protections afforded the Project Trust Account Model.
As a builder or contractor in the industry, it is important to be aware of the changes that will be introduced under the Act and to start preparing for the implementation of project trust accounts. The extension of the commencement date provides additional time for businesses to adjust and ensure that they are compliant with the new regulations.
How we can help
Peter Waller of our construction law team at MBA Lawyers can help you with the trust account requirements under the Building Industry Fairness (Security of Payment) Act 2017, as well as other contract advice and claims.
For more information, get in touch with Peter Waller by calling 07 5539 9688 or email peter@mba-lawyers.com.au
Peter Waller, Special Counsel – QLS Accredited Specialist – Commercial Litigation