UPDATE: Construction Contracts Act
Construction Contracts Act - new statutory trust model for retentions
From 31 March next year, retention monies under new commercial construction contracts must be held on trust in the form of cash or liquid assets. This change to the Construction Contracts Act 2002 represents a wider-reaching version of a similar regime recently introduced in New South Wales. The change – which was enacted in the wake of the collapse of Mainzeal – is intended to protect subcontractors from the insolvency of the parties holding retention monies.
To read more about the potential implications of the regime on contracting parties, their funders, and insolvency practitioners, click here.