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ARTICLE · 25 JULY 2011

Amendments to security of payment legislation

Moray & Agnew
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Amendment enables subcontractors to freeze money in the hands of a principal.

AustraliaReal Estate and Construction
Sean O'Sullivan
Sean O'Sullivan
Nicholas Mills
Nicholas Mills
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Introduction

The Building and Construction Industry Security of Payment Amendment Act 2010 NSW, introduced on 28 February 2011 ('Act') enables subcontractors to freeze money in the hands of a principal that is due to be payable to the head contractor.

The old regime

The Building and Construction Industry Security of Payment Act 1999 NSW ('SOP Act') was designed to facilitate a process for which subcontractors could receive timely payment for their work.

The SOP Act introduced quick adjudication of disputes over progress payments, however actual payment to subcontractors was not guaranteed as a subcontractors' entitlement to payment could be defeated by the insolvency of the head contractor.

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