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What is it?

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.

Our experts

Please get in touch with Cavell Leitch’s construction experts today if you have any questions about the proposed changes, or for any construction queries you may have.

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