Building & Construction – The new normal

As industry participants will be aware, the Queensland Building and Construction Commission (QBCC) (Minimum Financial Requirements) Regulation 2018 commenced on 1 January 2019 with the stated aim of “restoring the effectiveness of the Minimum Financial Requirements (MFR) for licensing and returning the QBCC’s powers to regulate those requirements”.

Our article of 17 November 2020 outlined certain key amendments, which commenced on 1 October 2020. 

To recap, license holders in Categories 1 to 7 are required to provide their financial information annually.  For the 2019/2020 financial year, that information was required by 31 December 2020. The QBCC announced on 8 February 2021 that as a result of this process, their compliance action in December 2020 and January 2021 resulted in:

• 7 licenses suspended for failure to comply with MFR

• 30 licenses suspended for other reasons including failing to pay debts and not meeting nominee requirements

• 5 licenses cancelled for failure to comply with MFR

• 34 licenses cancelled for other reasons including failing to pay debts and not meeting nominee requirements

Now that the Queensland economy is starting to recover (aside from some key sectors and geographical locations), we expect the QBCC will adopt a more hard-line approach in 2021 to MFR requirements.  All license holders therefore need to be certain they can provide the required information as part of submitting their annual financial reports and meet the MFR.

There were various other changes, which commenced on 1 October 2020 aimed at improving contractors’ ability to recover outstanding payments. One of the largest challenges we regularly see in the building and construction industry is obtaining payment for work completed in a timely manner.

One of the most significant changes is the ability for a head contractor, where it has not been paid for an adjudicated amount awarded in its favour, to secure a charge over real property owned by the principal (or related entities) on which the construction work and related goods and services were performed.

In order to request the registration of a charge over real property, a claimant must:

• be a head contractor;

• be owed an adjudicated amount which has not been paid in full by the due date;

• ensure the person or company who owes you money (respondent) or a related entity is the registered owner of the property where the construction work occurred or related goods and services were supplied; and

• have lodged the adjudication certificate as a judgment debt in the relevant court.

 If the claimant meets the above requirements, the process requires the filing of a Form 14- General Request with the Titles Registry along with:

• the adjudication certificate (or certified copy)

• a statutory declaration stating the:

  • details of the relevant property (lot on plan description)

  • adjudicated amount has not been paid

  • registered owner is a related entity for the respondent (if relevant).

The charge is valid for 12 months from registration and can be extended for an additional 24 months by an order of the court. If the amount owing remains unpaid, the claimant can apply to court for an order to sell the property (after giving notice to the registered property owner).

For further information on this and other changes refer below link to the QBCC Website.  

https://www.qbcc.qld.gov.au/protecting-your-payment-rights/payment-protection-laws

WCT Advisory are a specialist financial advisory and restructuring firm. We are here to help.