If you’re involved in the construction industry, you’ve no doubt heard about the new project trust account (PTA) requirements introduced by the Queensland Government which have been the topic of much debate over the last few years.
The debate largely centres around the functionality of the PTA requirements, particularly in light of the absence of any software capable of administering PTAs in a manner compliant with the legislation resulting in significant and costly administrative burden. Concerns have also been raised by a number of bodies regarding the difficulty of legislating the new PTA regime given the onerous framework created by the Building Industry Fairness (Security of Payment) Act 2017 (Qld).
Despite these concerns, the rollout of the PTA commenced in 2021 with eligible state government projects and projects in the private sector valued over $10 million now subject to the arduous regime.
The next phase, which sees the requirements apply to private sector contracts exceeding $3 million, was originally set to be rolled out on 1 July 2022. This date was later extended to 1 April 2023.
However, on 19 March 2023, the Queensland Government passed regulation delaying the rollout of this phase of the PTA requirements by a further two years in recognition of clear deficiencies in the PTA framework. The rollout to private sector projects over $3 million will now commence on 1 May 2025, with private sector projects exceeding $1 million to follow on 1 October 2025. Single houses and duplexes are still exempt from the PTA requirements regardless of project value.
The hope is that by delaying the rollout of the PTA requirements, necessary amendments can be made to the statutory framework to enable PTAs to operate as intended and provide proper security for contractors to ensure that they are paid for the work that they do, rather than creating unnecessary and costly administrative burden in an industry already struggling to deal with the ongoing ramifications of the recent pandemic and supply chain issues.
We will continue to monitor changes to the PTA requirements and their implementation.
This article provides general information and should not be taken to be legal advice. Each contract and set of facts are different and therefore you should obtain specific legal advice.
If you have any questions regarding project trust accounts, please do not hesitate to contact our team on (07) 3139 1874 or at email@example.com.