Since March 2018, Project Trust Accounts have been a requirement in certain building, construction and services projects involving government departments and hospital and health services in Queensland. From 1 January 2022, the Project Trust Accounts regime is being rolled out to the private sector and a broader range of government entities.
The Project Trust Accounts regime requires a head contractor to establish one Project Trust Account (PTA) for each ‘eligible contract’ for ‘project trust work’, along with a Trust Account for any retention monies held across all of the head contractor’s eligible contracts.
From 1 January 2022, Project Trust Accounts are applicable to:
The regime applies to contracts where over 50% of the contract price is for 'project trust work'. This includes the erection or construction, renovation, alteration, extension, improvement or repair of 'buildings', and related site work. Buildings are defined broadly to include any fixed structure that is wholly or partly enclosed by walls or a roof. There are a range of exclusions for particular sectors and types of work or contract, such as pure maintenance contracts.
These trust accounts will need to be opened with an approved financial institution, and there are extensive requirements for head contractors who have to act as trustees and establish and manage these trust accounts. They also have to hold any retention monies in a retention trust account.
Principals who are awarding contracts over $10 million also have obligations under the Act, including to ensure that a trust account is established if they know that one ought to be, and to make payments only into that account.
Contract terms will generally require some updating to deal with the regime, particularly given the hefty penalties for non-compliance, some examples of penalties include:
If you need assistance with preparing or implementing systems for this new phase of the rollout, or if you need assistance with whether or not it applies to your business or project, contact the Enterprise Legal team today:
☎️ (07) 4646 2621
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