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ARTICLE · 20 JULY 2017

Security of payment for construction contracts - what you need to know about legislative changes

Kemp Strang Lawyers
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For NSW construction contracts valued at or over $20million, retention money must be held in an approved trust account.

AustraliaReal Estate and Construction
Roger Mattar
Roger Mattar
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On 1 May 2015, significant changes were brought about regarding the treatment of the security of payment for construction contracts.

The Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) and the Building and Construction Industry Security of Payment Regulation 2008 (NSW) (Regulation) were amended to require retention money to be held in a trust account with an approved ADI for construction contracts entered into after 1 May 2015 valued at $20million or greater.

The value of the contract is determined on the consideration payable for construction work under the contract or, where the contract does not specify an amount, the market value of the work to be carried out and the value of goods and services to be supplied.

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