BIFOLA hits now: check new requirements
October 1 is the date some new requirements arising from the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (BIFOLA Act) come into play.
October 1 is the date some new requirements arising from the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (BIFOLA Act) come into play.
Key security of payment reforms commencing on October 1 that may apply to all projects. These include:
- Payment withholding request – Head contractors and subcontractors who have not been paid an adjudicated amount will be able to make a ‘payment withholding request’ to the party that is above their contractor. For the head contractor this can be the financier to the principal. Once served with a payment withholding request, the financier or higher party would need to withhold the requested amount from money that would be payable to the respondent.
- Charge over property – A head contractor who has not been paid an adjudicated amount, will be able to lodge a statutory charge over the property where the work took place and that is owned by the principal/respondent or a related entity of the principal/respondent. The charge over property offers the head contractor/claimant the ability to seek an order that the property be sold to satisfy the respondent’s debt to the claimant.
- Supporting statement – Payment claims made by head contractors will need to be accompanied by a supporting statement. This will apply to all construction contracts, not just to trust account contracts. The statement will need to declare that all subcontractors have been paid the amounts they are owed and list all subcontractors who have not been paid in full.
- Paying scheduled amount – A penalty will apply for failure to pay the scheduled amount.
Amendments to the QBCC Act will:
- Strengthen existing offence provision relating to causing significant financial loss that arises from non-compliance with contractual obligations
- Introduce an offence for causing false and misleading information about a licensee’s financial situation
- Improve sharing of licensing information across jurisdictions
- Provide the QBCC more time to start a prosecution.
The BIFOLA Act amends the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act), Architects Act 2002, Professional Engineers Act 2002, Retirement Villages Act 1999, Queensland
Building and Construction Commission Act 1991 (QBCC Act) and Building Act 1975 (Building Act).
The BIFOLA Act:
- Progressively implements trust accounts to all eligible building and construction projects valued at $1 million or more
- Strengthens the Minimum Financial Requirements for licensing
- Prevents excluded individuals from holding a site supervisor licence
- Introduces amendments relating to fire protection definitions and validating the current practice where related trades, such as plumbers, can install fire collars that are incidental to their work
- Introduces a penalty for delaying or obstructing the rectification of building work
- Clarifies that a certifier’s primary duty is to act in the public interest
- Gives owners the right to have additional non-mandatory building inspections and inspection documentation
- Introduces a demerit system for certifiers
- Improving professional development schemes for certifiers
- Improving the powers of the Board of Architects of Queensland (BOAQ) and Board of Professional Engineers of Queensland (BPEQ).
From 1 March 2021, the new trust account model will apply to eligible state government contracts valued between $1M and $10M. This cohort presently uses Project Bank Accounts (PBA).
The trust account framework will be further implemented to eligible contracts as follows:
- 1 July 2021—government and Hospital and Health Services (HHS) building and construction contracts valued at $1 million or more
- 1 January 2022— private sector, local government, statutory authorities’ and government-owned
corporations’ building and construction contracts valued at $10 million or more. - 1 July 2022— private sector, local government, statutory authorities’ and government-owned
corporations’ building and construction contracts valued at $3 million or more. - 1 January 2023— all eligible building and construction contracts valued at $1 million or more (full implementation).
Further information including regarding mechanical services, landscaping and fire collars work, fire protection licensing, building certifiers, architects and professional engineers is available here.
The BIFOLA Act further delivers on the 2017 Queensland Building Plan reforms and implements the Queensland Government’s responses to two independent reports relating to the building and construction industry; the Building Industry Fairness Reforms Implementation and Evaluation Panel (Panel) report, and the Special Joint Taskforce (Taskforce) report. The BIFOLA Act also responds to the national Building
Confidence report recommendations.
The Institute has made a range of submissions over the recent period highlighting for government the many issues for business continuity and jobs creation arising from these new changes.
Any views that you have on this can be provided to Policy Manager, Martin Zaltron, via email or on (07) 3229 1589.