Security of Payment Issues Identified in WA Construction Contracts

Following recent compliance inspections conducted by Building and Energy, it was found that 80% of reviewed construction contracts contained issues relating to the Building and Construction Industry (Security of Payment) Act 2021 (SOP Act).

The top four issues identified were:

• Contracts missing mandatory information required under section 13 of the SOP Act.
• Contract terms that may, in certain circumstances, be inconsistent with provisions of the SOP Act.
• Registered building contractors failing to comply with the retention trust requirements.
• Registered building contractors subcontracting prescribed building services to individuals not authorised to perform that work.

MEA’s Advocacy

Master Electricians Australia is leading national advocacy for reform to the SOP framework to better protect subcontractors.

In particular, MEA is calling on all Australian governments to support:

• The establishment of a central authority to hold retention funds; and
• The ability for parties to exchange non-cash security (e.g. bank guarantees) for cash retention, and vice versa.

You can read more about MEA’s advocacy on Security of Payment reforms here.