Key changes to the Construction Contracts Act 2002 (“CCA”)

The purpose of the CCA is to provide a framework for payment under construction contracts, when those payments are due, and provides remedies for recovering payments under construction contracts.

The Construction Contracts Amendment Bill, which was introduced to the House on 29 January 2013 is set to make three key changes to the CCA, which will have significant effect on the construction industry.

The first key change is streamlining the categorisation of construction contracts. The distinction between commercial and residential construction contracts will be removed in favour of a single classification: 'construction contracts.' Practically, this means that the payment regime, rights to suspend work for non-payment and enforcement rights now applies to contracts between builders and home owners.

The second key change is to expand the definition of construction work. Under the new provisions, construction work will include design, engineering and quantity surveying. Practically, this means that professional service providers who previously sat outside the scheme of the Act will now be subject to it.

The third key change is in relation to enforcement of an adjudication determination with the Court. To speed up the enforcement process the change looks to reduce the current 15 working day timeframe for making an opposition, to 5 working days.

If you have any questions in relation to the proposed changes or to building and construction law issues in general then please contact Richard Kettelwell, Michelle Paddison or Rebecca Catley.