From the 1st of February 2023, new eligible Western Australian contracts valued at $1 million or more for construction work or related goods and services, and under which retention money is withheld, will require a contracting party to deposit the funds in a separate trust account.
The Western Australian Government has improved payment protections for building and construction subcontractors, with new trust account requirements and strengthened regulatory powers now in effect.
The second stage of the Building and Construction Industry (Security of Payment) Act 2021 implements an Australian-first retention trust scheme that applies down the supply chain.
From the 1st of February 2023, new eligible Western Australian contracts valued at $1 million or more for construction work or related goods and services, and under which retention money is withheld, will require a contracting party to deposit the funds in a separate trust account.
The new requirement means better protections for subcontractor retention money in the event of insolvency on a project.
Greater powers enabling the Building Services Board to exclude people with a history of financial failure from starting or continuing a building service business also come into force 1st of February 2023.
In addition, building service contractors who fail to pay court and adjudication debts to subcontractors can now be denied registration or receive disciplinary action.
The third stage of security of payment changes will come into effect in February 2024, with the retention trust scheme extending to applicable contracts valued at $20,000 or more, and new rules introduced to uphold fairer contracting practices.
Fact sheets, videos and other resources with more information on the new laws are available on the Building and Energy website.