Have Your Say On The Construction Contracts (Retention Money) Amendment Bill
You can now have your say on the Construction Contracts (Retention Money) Amendment Bill, a government bill that is currently before the Transport and Infrastructure Committee.
This bill’s core purpose is to clarify the retentions regime under the Construction Contracts Act 2002. Retention money refers to part of a payment, under a construction contract, that is held back by a payer (for example a contractor) as security to ensure a payee (for example a subcontractor) fixes any defects with their work. This can cause problems when a contractor becomes insolvent, and/or if retention money has been mixed with the contractor’s other money and assets, resulting in subcontractors not being paid for their work.
The bill clarifies that retention money must be:
· Placed on trust as soon as possible by a contractor for a subcontractor (or other party it is being held for)
· Held on trust separately from the contractor’s other money or assets
· Held in a trust account in a registered bank in New Zealand or in the form of complying instructions
The bill also introduces offences and penalties for non-compliance with the bill’s requirements.
Tell the Transport and Infrastructure Committee what you think
Make a submission on the bill by midnight on Friday 23 July 2021.