A head contractor that is a party to a construction contract with a principal with a value of at least $20 million is required to keep retention money in a specific trust account held with an Authorised Deposit-Taking Institution (ADI).

The name and description of the account must include the head contractor’s name and the words ‘trust account’, and the ADI must be given notice in writing that the account is a retention money trust account for the purposes of the Building and Construction Industry Security of Payment Regulation.

Within 10 business days of opening the account, the head contractor must also let the Secretary know:

  • the name of the approved ADI
  • the branch or BSB number of the approved ADI
  • the name and number of the account
  • the opening balance of the account
  • the date the account was opened.

Head contractors can only withdraw money from the trust account:

  • in accordance with the contracts between them and the relevant subcontractors
  • as agreed in writing with the relevant subcontractors
  • to pay an adjudicated amount that is required to be paid under section 23 of the Building and Construction Industry Security of Payment Act
  • pursuant to an order of a Court or Tribunal

Withdrawals can only be made by cheque or electronic funds transfer (EFT)

If a trust account becomes overdrawn, the head contractor must let the Secretary know, within 5 business days:

  • the name and number of the account
  • the amount by which the account is overdrawn, and
  • the reason for the account becoming overdrawn.

Notifying the Secretary

Section 4 of the Building and Construction Industry Security of Payment Act defines “Secretary” in the following way:

“Secretary means—

(a)  the Commissioner for Fair Trading, Department of Finance, Services and Innovation, or

(b)  if there is no person employed as Commissioner for Fair Trading—the Secretary of the Department of Finance, Services and Innovation.”

Notifying the Secretary simply requires getting in touch with the Secretary in writing.

To notify the Secretary in writing, you can email SecurityofPayment@finance.nsw.gov.au or write to:

NSW Fair Trading
Security of Payment Branch
PO Box 972
Parramatta NSW 2124

 


 

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