Security of Payment

Project Bank Accounts

A Project Bank Account (PBA) is a set of three trust accounts where funds are held in trust for head contractors and subcontractors until payments are due, as part of a building project. The three accounts secure progress payments, disputed funds and retention money, until they are paid to a subcontractor.

Phase One of PBAs will begin on State Government funded projects valued between $1 million and $10 million (including GST), from 1 March 2018. PBAs will need to be established by head contractors for each project. They will be required to open three trust accounts, a general account, a retention account and one for any amount of money subject to a dispute.

Subject to a review of Phase One, PBAs will be required on all building projects with a contract value of more than $1 million (including GST), in 2019.
PBAs will not apply to engineering and infrastructure projects including bridges, roads and ports, unless ‘building work’ makes up 50% or more of the contract value.

For more information on the responsibilities of each party to a PBA, the Department of Housing and Public Works has prepared a series of guidelines and summary guidelines, which are available here.

Written notices as required by the BIF Act

Section 26 Notice of trust account’s opening, closing or name change and Section 37 Ending Project Bank Account of the BIF Act state that information needs to be as a written notice but does not go on to define what format that must be in. Written notice should be provided using the method (email, fax or letter) expressly consented to by the parties, usually but not always as expressed in the contract terms.

A Section 26 Notice of trust account’s opening must state:

(a) the name of the project bank account;
(b) the name of the trust account;
(c) the name of the financial institution where the trust account is or was kept;
(d) the identifying number of the financial institution; Note— The identifying number is commonly referred to as the bank state branch number (BSB).
(e) the trust account number.

A Section 37 Ending Project Bank Account that is sent from the head contractor to the principal must state that the project bank account has been dissolved.

Project Bank Account Forms

Project Bank Account Complaint Form

If you have a complaint about the management of a project bank account, you can contact the QBCC using the Project Bank Account Complaint Form. A complaint could be about anything to do with a project bank account, including: 

  • an issue with the opening or closing of a project bank account,
  • an incorrect transfer of money to or from a project bank account, or a discrepancy in the payment instruction,
  • a written notice or approved form not received in relation to a project bank account,
  • any other areas where a party may wish to advise the QBCC of PBA complaints.

Return your fully completed form and ALL required documents by:

S49 Notice of Project Bank Account before Entering Subcontract Form 

Before entering into a subcontract, the head contractor must give the subcontractor the project bank account information using the S49 Notice of Project Bank Account before Entering Subcontract Form.  If the head contractor entered into a subcontract for the building contract before the day (the start date), a project bank account is required for the contract, the head contractor must give the subcontractor the information within 10 business days after the start date. This form is not required to be sent to QBCC.

S50 Principal to be Given Information about Subcontracts Form

After opening a project bank account, the head contractor must give the principal a S50 Principal to be Given Information about Subcontracts Form within five business days of entering into a subcontract for the building contract. 

During the subcontract, if there is a change to the subcontractor information, the head contractor must advise the principal of the updated/changed information using the S50 Principal to be Given Information about Subcontracts Form. This form is not required to be sent to QBCC.

S21 Notice of Related Entities Form

If a project bank account is established for a project, and the head contractor subcontracts to a related entity, a s21 Notice of Related Entity Form must be completed and provided to the Principal and to the QBCC. 

If the related entity subcontractor further subcontracts out any of the work (ie. to a sub-subcontractor), then the related entity subcontractor will also be required to establish project bank accounts for the project. 

If a head contractor enters into a subcontract with a related entity, they must notify the principal contractor and the QBCC within five business days after entering into the subcontract.The principal contractor is then also required to notify the QBCC within five business days after they’ve become aware of the relationship.

The form for the principal and head contractors to use is the S21 Notice of Related Entities Form. This form must be sent to the QBCC.

For a full definition of a related entity please refer to Section 19 of the Building Industry Fairness (Security of Payment) Act 2017. 

Examples of related entities may include:

  • a family member, e.g. brother, sister, nephew, niece, parent, grandparent and it also includes spouse/partners and their family members,
  • a majority shareholder, director or secretary of the corporation (company),
  • a related body corporate of the corporation,
  • an individual who has an interest of 50% or more in the corporation. 

If the principal contractor suspects that a related entity exists between the head contractor and a subcontractor, and they haven’t been advised, then they can lodge a Project Bank Account Complaint Form which the QBCC can use to start investigations.

Return your fully completed form and ALL required documents by:

S54 Notice of Principal Replacing Head Contractor as Trustee 

If the head contractor is terminated for contractor default, or the head contractor enters into insolvency, the principal may step into the role of trustee. The principal is required to complete the S54 - Notice of Principal Replacing Head Contractor as Trustee, this form notifies the head contractor that the principal will replace the head contractor as trustee of the project bank account.

Upon receipt of the notification the head contractor must:

  • Give the principal the information required to act as trustee. This includes details of the relevant financial institution and bank account details and contact information for each subcontractor beneficiary, including current or outstanding payment claims and copies of payment schedule issued.
  •  Advise the relevant financial institution that the principal will act as trustee.

The head contractor remains liable for any act or omission concerning the PBA and must continue to comply with its obligations under the Act. As the acting trustee over the project bank account the principal may, via payment instruction, make payments to the subcontractor beneficiaries or head contractor as a beneficiary that are required to be made under the Act.

S42 Power to Delegate Form

The head contractor may employ or engage an agent to do any act relating to the project bank account on behalf of the head contractor. A head contractor may also, using the approved S42 Power to Delegate Form, delegate to a person who is a resident in the state, any powers of the contractor in relation to a PBA (other than the power to delegate). The delegation takes effect if the person accepts the delegation, and during the periods stated in the S42 form.

A copy of the form must be provided to the principal and the subcontractor. The approved form must state which powers of the contractor are to be delegated, including any exemptions, and the period/duration of the delegation. This form is not required to be sent to QBCC.