The construction industry will see some significant changes in the long-awaited Construction Contracts Amendment Act which was passed in October. The impact will be felt by every building owner, homeowner, contractor and subcontractor.
This new legislation will require retentions money – that could previously be put at risk by the main contractor and used as working capital – to be held in trust and given priority in the event of a business failure. The legislation also covers residential building work, as well as commercial building contracts. Also included in the legislation is better access to dispute resolution for all parties.
The scope of the Act has also been widened. From 1 September 2016 the legislation will cover construction-related services, such as work carried out by architects, engineers and quantity surveyors.
The new legislation comes into effect for new construction contracts on 1 December 2015.
To find out more, see www.building.govt.nz/construction-contracts-act