What you need to know

A bill was introduced to Parliament on 1 June 2021 proposing changes to how retentions in construction contracts are to be dealt with.

The key proposed changes

• Retention money will have to be held separately, and can’t be mingled with other funds.
• Those holding retentions will need to provide regular reports.
• Payment schedules will need to specify how much retention money is being withheld, and in what form.
• Receivers and liquidators will hold the retention money on trust and can administer the retention funds for contractors.
• Penalties are introduced for failing to comply with the retention regime, including fines of up to $200,000.

What next

The bill will now progress through Parliament and, if passed, will come into force 6 months later.