QLD subcontractors - did you know there are legislative protections deterring long waits for a due date for payment?

This one is a doozy - common knowledge to Queensland builders but subcontractors are often really surprised when I let them in on this secret.

Under the Queensland Building and Construction Commission Act 1991 (QLD) ("QBCC Act"), a due date provision in a subcontract that falls later than 25 business days from the date of claim/invoice is rendered void. It's essentially a deterrent for arbitrary long waits for a due date for payment.

When a contract provision is void, it has no effect - it's as if its not even there.

This alone isn't overly exciting, and the next question is often, "Well what is my due date if the contract provision is void?"

This is the good bit, Queensland's security of payment legislation (both the BCIPA and Chapter 3 of the BIF*) provide that where a due date provision is void because it contravenes the QBCC Act (25 business day rule), the security of payment legislation steps in and provides an earlier due date of 10 business days from date of invoice/claim.

So if you've got one of those nasty contracts with a builder that says your payment terms are 45 days end of month, you're sitting around waiting for payment when your claim is likely already actually due.

Don't feel bad for builders though - they're protected too. If a head contract provides for a due date later than 15 business days, it's void under the QBCC Act and the security of payment legislation steps in to give a them due date of 10 business days from date of invoice/claim.

The QBCC Act is essentially striving to create due dates for builders no later than 15 business days, and then a due date for the builder's subcontractors no later than 25 business days.

So if the world was fair and everyone got with the program, nobody's cash flow should be stretched waiting for a payment.

*The current security of payment legislation is the Building and Construction Industry Payments Act 2004 (QLD), until 1 July when it is anticipated that Chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017 (QLD) will be proclaimed into force.