Security of payment – NSW

Effective 1 March 2021, the Building and Construction Industry Security of Payment Regulation 2020 (NSW) Schedule 2 has introduced important consequences for owners and contractors on all residential building in NSW where the owner occupies or plans to occupy the home at the end of the project ('homeowner projects'). This change also impacts the ABIC Simple Works H NSW contract. These changes mean administering homeowner projects has changed and NSW architects need to be aware that:

• The limitation in the Home Building Act (NSW) that only stage progress payments were authorised no longer applies to homeowner projects. This means that monthly progress claims and payments are once again permitted in building contracts for homeowner projects. This includes typical projects under an ABIC SW H NSW contract.
• The NSW Security of Payments legislation now applies to homeowner projects. This benefits the contractor's rights to secure timely payment. If a contractor serves an SOP claim and invoice, the homeowner/client needs to be aware of the time frames and procedures in the legislation.

Note. The ABIC authors are planning to revise the ABIC Simple Works H NSW contract to reinstate the familiar ABIC-standard monthly progress payments, which will bring it in line with the Major Works H NSW contract.