• Aitchison Reid

Security of Payment under BIF is now live!

Updated: Jul 17


Make sure it’s not a knock out!

Today the following of the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) go live:

  • Chapter 3 – Progress payments;

  • Chapter 4 – Subcontractor’s Charges;

  • Chapter 5 – Administration of the Adjudicators; and

  • Section 278 – Amendments to the QBCCA.

What does this mean for the humble subbie?

It means that security of payment is pretty much mandatory. Whether you want to or not, you will be sending payment claims under the BIF Act. It also means that your own subbies and suppliers will also be sending you payment claims under the BIF Act. And if you do not follow the rules as a payer there are serious consequences including potentially:

  • Becoming liable for the entire amount claimed if you do not send a payment schedule within 15 business days of receiving the payment claim; and

  • Receiving a QBCC fine of up to $13,055 (100 penalty units) for not sending a payment schedule within 15 business days and not paying the payment claim in full by the due date for payment.

The intention of these changes is to make money flow from the payer to the claimant quickly and according to the contract.

Below we have a brief summary of the changes:

Progress payments

The major changes include:

  • Payment claims no longer need to state “This is a payment claim under the Building and Construction Industry Payments Act 2004”.

  • Payment schedules are now due in 15 business days instead of 10 business days;

  • There are QBCC infringements if you are a payer and you do not comply with the BIF Act; and

  • The time period for applying for adjudication has increased from 10 business days to 30 business days.

Subcontractor’s Charges

The major changes include:

  • The Act is rewritten in plain English; and

  • The Contractor’s Notice is now mandatory and if the Contractor does not provide the notice within 10 business days of receiving the Notice of Claim, the Contractor can receive a QBCC fine of up to $2,611 (20 penalty units).

Administration of Adjudicators

The major changes include:

  • Adjudicators are to complete CPD training; and

  • Adjudicators are to be held to a code of conduct.

Section 278 – amendments to the QBCCA

The major changes include:

  • If a contract does not state the defects liability period, the Act has a default provision of 12 months from practical completion;

  • There is a positive obligation on those holding retentions to notify the subcontractor of the end of defects liability period;

  • There is a positive obligation on those holding retentions to pay the retentions; and

  • There are QBCC fines is notices are not given and retention amounts are not paid.

Want to know more?

Check out our online course at https://courses-arbuildinglaw.thinkific.com. The course is designed specifically for subbies and trade contractors and it is all about getting paid and being a payer under the BIF Act. The course has a number of useful downloads as well as 2.75 hours of video content.


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#paymentclaim

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