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The BIFOLA Act: Changes to payment laws and what you need to know

Updated: Dec 15, 2020

If you work in the Queensland building and construction industry, chances are you have heard about the Building Industry Fairness (Security of Payment) and other Legislation Amendment Act 2020 or the BIFOLA Act as it is commonly referred to. Passed by the Queensland Government earlier this year in July, amendments span across current legislation.

So, in terms of payment laws, what exactly is changing?

Let’s start with the *Why*

New legislation has been designed to strengthen payment laws and protections for contractors. New laws aim to ensure that anyone in the industry who has not been paid, can access payment dispute options and reinforces the right for every person to get paid.

Changes coming into effect in October 2020

Under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) the following amendments will come into effect from 1 October 2020:

  • Head contractors will be required to provide a supporting statement to the principal with every payment claim. This will provide advice about whether subcontractors have been paid and if they have not been paid the reason/s why. New penalties will apply for the failure to provide a supporting statement or for the provision of misleading or false information in a supporting statement.

  • Contractors will face new penalties if they respond to a payment claim by providing a payment schedule but fail to pay the agreed amount in that schedule by the due date.

  • Failing to release a retention amount (an existing offence) has been expanded. Now, it will also be an offence for failing to release other securities. For example, bank guarantees.

  • The respondent in an adjudication decision must now notify the Adjudication Registry and provide proof of payment.

  • To help secure payment of an adjudicated amount, new options will be available to contractors. This includes:

    • Payment withholding requests: Head contractors and subcontractors can submit a payment withholding request to the party above their contract (e.g. financier). This party is required to withhold the requested amount from funds that would be payable to the respondent.

    • Charge over property: Head contractors will have the ability to put forward a statutory charge over the property where the work took place and is owned by the principal/respondent or related entity. This means the head contractor/claimant can seek an order that the property be sold so the respondent’s debt to the claimant is satisfied.

Other changes

There are a range of other changes coming into effect relating to Project Trust Accounts, measures to enhance building certification and strengthening certain licensing provisions. For more information about these changes, visit the QBCC website or the Queensland Government website. Commencement dates for these changes vary with a phased approach being implemented in some areas.

If you have any questions relating to the new laws coming into effect, speak with a lawyer. At Jensen & Co Lawyers, our team specialises in building and construction law. Firm partner, Noel Jensen is a level two adjudicator and firm partner, Jeremy Cotter is an adjudicator under the Building Industry Fairness (Security for Payment) Act 2017. Contact our team for a confidential, no-obligation discussion.


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