QBCC liability period and retentions

From 17 December 2018, new requirements apply to the retentions, security and a statutory defects liability period.

If under a building contract:

• a retention amount may be withheld; or
• a security may be held after practical completion for the rectification of any defects in the building work

Any retention amounts or security must be released 12 months after practical completion if the contract does not specify the defects liability period.

Also, there is a new requirement that contractors need to give a Notice of End of Defects Liability Form to subcontractors advising of the impending end of the defects liability period. Non-compliance is an offence.

This notice must be given within 10 business days before the end of the defects liability period or within 5 business days after receiving a notice if the defect liability period is linked to another building contract. This requirement does not apply to a contracting party who enters into a building contract as a principal.

Releasing retentions

It is now an offence with QBCC to withhold a subcontractor’s retention money without a reasonable excuse. There is a maximum penalty of 200 units or one year’s imprisonment.

Further help:

If you are experiencing problems with retention amounts, contact one of our specialist QBCC accountants. You can reach us on (07) 3023 4800 or at mail@marshpartners.com.au.

Visit our QBCC page to find out more about how we help.

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