Changes to security of payment laws
From 3 February 2020, new laws will apply to payment claims for construction work in the Northern Territory.
The changes aim to:
- protect contractors’ rights, particularly small contractors, to ensure they are paid fairly
- make it easier to have payment disputes resolved quickly.
If you work in the building and construction industry, you must follow these new rules.
Changes to current laws
Changes include amendments to the following acts and regulations:
- Construction Contracts (Security of Payments) Act 2004
- Construction Contracts (Security of Payments) Regulations 2005
- Community Justice Centre Act 2005.
Read below to find out more.
The Act has been amended to:
- when a payment dispute arises
- when adjudication may occur
- how determinations may be enforced
- standardise the timeframes in which something must be done to “working days” and define the meaning of that term by:
- confirming that a working day does not include a Saturday, Sunday or public holiday
- excluding all days between 25 December of one year and 7 January of the following year from working days
- modifying adjudication timeframes and revising the processes for appointing adjudicators
- allow parties to a high value construction contract to opt out of the adjudication process set out in Part 3 of that Act, if they agree to an alternative dispute resolution process that meets the requirements of the Construction Contracts (Security of Payments) Regulations 2005. However, parties with a high value contract opting out will not affect those contractors lower down the contract chain
- protect small sub-contractors by ensuring parties to high value contracts continue to make payments if they have not been able to resolve their dispute within 45 working days
- transfer the review jurisdiction from the Local Court to the Northern Territory Civil and Administrative Tribunal.
Construction Contracts Regulations 2004
The regulations have been amended to:
- set the minimum monetary threshold of 500,000,000 monetary units for a construction contract to meet the definition of high value construction contract
- establish what the alternative dispute resolution process within a high value construction contract must contain if the parties to that contract agree to opt out of the operation of Part 3 of the Construction Contracts (Security of Payments) Act 2004.
- set out the information that must be provided to the Construction Contracts Registrar when registered adjudicators apply, or are nominated for, renewal of their registration.
The Act has been amended to allow the monetary limit for payment claims that may be adjudicated through the Community Justice Centre to be set out in regulations, replacing the current statutory cap of $10,000.
Community Justice Centre Regulations 2019
New regulations will also come into effect on 3 February 2020 and set the monetary limit at 30,000 monetary units (the equivalent of $30,300 for the 2019 to 2020 financial year).
The amendments are made by the Construction Contracts (Security of Payments) Legislation Amendment Act 2019 (the Amendment Act). Read the Act.
Last updated: 24 January 2020
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