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From March 2018, government projects with a contract price between $1 million-$10 million require a Project Bank Account ( PBA ). PBAs will only apply to contracts where more than 50% of the contract price is for building work, where the principal is the State government or authority (if they elect to opt in) and when the head contractor enters into a subcontract for all or part of the contracted building work. PBAs are NOT required for maintenance work contracts or contracts issued or advertised for tender prior to 1 March 2018. There are some additional obligations in the Government's head contracts which you are also required to comply with. as well as the Regulations and the Transitional Regulations. What is a Project Bank Account (PBA)? PBAs are a trust over: Amounts paid by the principal to the head contractor Amounts that the subcontractor is entitled to be paid under a subcontract Retention amounts withheld from a subcontractor under a subcontract Amounts that are the subject of a payment dispute under the Act . PBAs only apply to first tier subcontracts (unless the subcontractor is a related entity of the head contractor). Some suppliers are considered first tier subcontractors. The head contractor is the trustee over the PBA. Account requirements Accounts must: be opened at office or branch of financial institution within QLD not permit deposits/withdrawals other than by electronic transfer permit withdrawals by payment instruction to bank only permit transfers between trust accounts by payment instruction to bank only include  "trust account" in Account Name The principal (and/or its agent) must be able to view: all transactions in/out of trust accounts information on payment instructions account payment reports. The head contractor may close trust accounts if: subcontractors have been paid all amounts they are entitled to be paid under the subcontracts only building work to be done is maintenance work (Note: Head contractor must notify principal of closure within 10 business days) The head contractor should notify principal of account details within 10 business days when: opening a trust account changing name of a trust account closing a trust account. Prior to entering into a subcontract and in approved form, or if the contract becomes a PBA contract after, then within 10 business days of that date, the head contractor should notify the subcontractor that: PBA will be used for payments details of PBA accounts. Within 5 business days of entering into a subcontract or a change occurring and in approved form, the head contractor must notify the principal of the subcontract info prescribed by regulation. Need more information on how to implement PBAs? Contact Merlo Law  This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

Industry expert John Merlo says it is only a matter of time before the effects of COVID-19/Coronavirus spread to the construction industry’s current and future projects. John Merlo from Merlo Law, says construction workers, contractors, architects and engineers will certainly be impacted by COVID-19/Coronavirus. “The Coronavirus is affecting everything from travel to site to work environments, including construction projects on the ground, to apprentices going to college and to toolbox meetings." Time is of the essence with your construction contract With the virus expanding in the Australia, John Merlo expects the impact on all construction activities to become more profound. As construction workers become laid-off, stood down, infected, and sick and quarantined, labour shortages will inevitably arise. These delays are going to have vastly profound impacts not only with ongoing construction projects, but also with projects in the pipeline. Owners and contractors will be involving their lawyers far more often in a bid to stay alive in turbulent times. John Merlo says time is often of the essence and clauses involving time will become even more relevant. There are many clauses that will be relevant relating to the contractor’s schedules, such as substantial completion, delays, extension of time, liquidated damages, set-off and other contractual provisions. Often there are strict and fatal time bars in construction contracts which stop your right to recovery, to damages, and to claim delay. Those time bars could be the difference between life and death for companies and partnerships right now. Termination for convenience of construction contract Termination for convenience is also a major risk right now says John Merlo. “I foresee much argument over clauses like the ones mentioned and excuses by contractors for shortages in labour caused by the COVID-19/Coronavirus.” “There will be heated discussions between Contractors, Engineers, Construction Managers and Principals and Owners regarding the impact of COVID-19/Coronavirus, and the various contractual provisions regarding delays, extension of time, substantial completion, frustration and force majeure events and whether such events give a good excuse to invoke the ‘Termination for Convenience’ clause of the contract in order to hire  a contractor who can provide sufficient labour force to complete the project in a timely manner.” Don’t take a risk – talk to John Merlo now to protect your position. Certainly the scheduling of the contractor’s work is of utmost importance to all contracts says John Merlo. With the emergence of the COVID-19/Coronavirus and labour shortages, in an industry already plagued by shortages, reviewing your time clauses is essential and absolutely paramount. “I also suspect that the lawyers for Head Contractors, Principals and Owners will be reviewing the contracts of their clients to see what they’ve agreed to do, and what contractual rights and duties exist in light of the conditions caused by the spread of the COVID-19/Coronavirus." Many will be reviewing agreements to see if timely performance is excused by the labour shortage caused by this virus, he says. Several of the major standard form contracts include provisions designed to deal with extreme circumstances beyond a contractors control. John Merlo says there will be more than a few debates about the words and phrases therein, and all contractors should seek to have a lawyer clarify, sharpen and close out the possibility of exclusion, ambiguity or limited utility in those provisions. Contractors should also be exceptionally wary about any non standard boutique or amended standard form contracts – and get advice from John Merlo immediately before signing. John Merlo reminds all contractors that the usual practice of not signing a contract and starting work is exceptionally fraught with risk with the emergence of the COVID-19/Coronavirus, and all contracts should be submitted for review and action immediately. Litigation and dispute resolution John Merlo says as a result of COVID-19/Coronavirus there will be a massive increase in claims relating to contractual scheduling and project obligations;  adjudication, mediations, arbitrations and litigation over contract terms such as delay clauses, force majeure provisions, liquidated damages and other terms will certainly be filed.” Construction worker protection and contractually mandated healthcare facilities might increasingly also come into being, he surmises. In addition to contract provisions relating to work and labour scheduling, timing and completion of work, John Merlo says other clauses or covenants may start to be implicated in disputes between owners and contractors as a result of COVID-19/Coronavirus. For example, Principals and Owners ought to consider drafting new terms requiring testing or to quarantine of workers involved in segmented areas of a project, or even of inbound labour forces before they are released into the wider project. John Merlo says major infrastructure built environment and construction projects may conceivably need to establish operating facilities, for quarantine or other medical facilities. Social distancing Social distancing has become mandated by the federal and state governments. John Merlo says there may be Principals, Owners or Contractors suspending work for stated periods, relying on ‘social distancing’ policy which may or may not be being used legally or allowed under the contract terms. Advice should be taken without delay says John Merlo. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

Under the Corporation Act 2001, directors are personally liable if a company trades while insolvent. Ordinarily board of directors under pressure ought to enter into an insolvency process if there is any risk that the company will experience periods where it will be trading while insolvent. To buy confidence, and assist companies to have confidence to continue to trade through the Coronavirus health crisis with the aim of returning to the black when the crisis has passed, directors are to be temporarily relieved of their duty to avoid insolvent trading with respect to any debts incurred in the course of the company’s business.  These ‘pardon’ will relieve a director from personal liability that would otherwise be associated with insolvent trading. The emergency pardon will apply for six months at this stage. Cases of dishonesty and fraud will still be subject to the usual criminal penalties. Important note about insolvent trading Any debts incurred by a company will still be payable by the company. This is not a moratorium on debt simply a moratorium on the finding of insolvent trading. What should you do? Contact Merlo Law for advice and assistance now. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

The Queensland Civil and Administrative Tribunal (QCAT) is a vital part of Queensland's justice system, offering an accessible and cost-effective way to resolve disputes and review decisions. Whether you’re dealing with a building dispute, a residential tenancy issue, or a consumer complaint, QCAT provides an alternative to traditional court proceedings. This article answers common questions about QCAT, its processes, and how it can help you resolve legal matters efficiently. What is QCAT and What Does It Do? QCAT is an independent tribunal established under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) . Its purpose is to provide a forum for resolving disputes quickly, inexpensively, and fairly. Unlike traditional courts, QCAT is designed to be less formal and more accessible, allowing most individuals to represent themselves. Key Features of QCAT in Queensland Accessibility : Open to individuals and businesses without requiring legal representation. Cost-Effectiveness : Lower application fees compared to courts. Efficiency : Disputes are resolved through hearings, mediation, or compulsory conferences. QCAT handles a wide range of matters, including building disputes, residential tenancy issues, consumer complaints, and more. Its decisions are legally binding and enforceable. What Types of Disputes Can QCAT Resolve? QCAT has jurisdiction over a variety of disputes and administrative reviews. Here are the main types of matters it handles: 1. Building Disputes QCAT resolves disputes between homeowners, builders, contractors, or subcontractors. These may include defective work claims, delays in project completion, or disagreements over payments. 2. Residential Tenancy Disputes Landlords and tenants can bring issues such as bond disputes, rental arrears, or breaches of lease agreements before QCAT. 3. Consumer Disputes Disputes between consumers and businesses regarding goods or services fall under this category. Examples include defective products or misleading conduct by a business. 4. Debt Disputes QCAT hears claims for unpaid debts up to $25,000. These cases often involve personal loans or unpaid invoices between individuals or businesses. 5. Tree Disputes Neighbourhood conflicts involving trees that cause damage or obstruction can be resolved through QCAT. 6. Anti-Discrimination Complaints QCAT addresses complaints about discrimination in areas such as employment or education based on attributes like race, gender, disability, or age. 7. Guardianship for Adults The tribunal makes decisions about guardianship and administration for adults with impaired decision-making capacity. 8. Review of Administrative Decisions QCAT reviews decisions made by government agencies in areas such as licensing or permits. Other areas include: Retail shop lease disputes Minor civil disputes Discipline and regulation of professionals How Do I Apply to QCAT in Queensland? Applying to QCAT involves the following steps: Identify the Type of Matter : Determine which category your issue falls under (e.g., building dispute, tenancy issue). Complete the Relevant Form : Download the appropriate application form from the QCAT website. Attach Supporting Documents : Include evidence such as contracts, invoices, photographs, or expert reports. Pay the Application Fee : Fees vary depending on the type of matter. Lodge Your Application : Submit your completed form and supporting documents to QCAT via post, email, or in person. Once your application is lodged, you may need to serve copies of the documentation on all parties involved in the dispute. Do I Need a Lawyer for QCAT Proceedings? While QCAT encourages self-representation to keep costs low and processes simple, there are instances where legal representation may be beneficial: Complex matters such as building disputes Appeals involving errors of law Cases where the other party has legal representation To have a lawyer represent you at QCAT hearings, you must apply for permission unless representation is automatically allowed (e.g., cases involving children or individuals with impaired decision-making). What Happens During QCAT Proceedings? QCAT resolves disputes through various methods: 1. Mediation Mediation involves an independent mediator helping parties reach an agreement without proceeding to a formal hearing. 2. Compulsory Conferences These structured meetings aim to identify issues in dispute and explore settlement options before a hearing. 3. Hearings If mediation or conferences fail to resolve the matter, a hearing takes place where both parties present their case before a tribunal member or adjudicator. Tribunal members make decisions based on evidence provided during the proceedings. These decisions are legally binding and enforceable. What Costs Are Involved in QCAT Matters? While QCAT is designed to minimise costs for parties involved, certain expenses may still arise: Application fees (based on the type of matter) Costs associated with gathering evidence (e.g., expert reports) Travel expenses for attending hearings In some cases, the successful party can apply for costs reimbursement from the other party. However, costs are not automatically awarded; they depend on factors such as the conduct of parties during proceedings. Can I Appeal a QCAT Decision? If you’re unhappy with a decision made by QCAT, you may have the option to appeal under specific conditions: 1. Grounds for Appeal Appeals can be made on: Errors of law Errors of fact Mixed questions of law and fact Permission (leave) from the tribunal is required for most appeals unless they involve questions of law alone. 2. Time Limits You must lodge your appeal within 28 days of receiving written reasons for the decision being appealed against. 3. Appeal Process The appeal process involves: Filing Form 39 – Application for Leave to Appeal or Appeal. Attending a directions hearing where preliminary issues are addressed. Presenting submissions at the final appeal hearing. Receiving a decision from the Appeal Tribunal based on submissions provided. What Are Possible Outcomes of an Appeal? The Appeal Tribunal may: Confirm or amend the original decision Set aside the decision and substitute its own Set aside the decision and return it to QCAT for reconsideration It’s important to note that appealing does not automatically pause (stay) the original decision’s effect unless specifically ordered by QCAT upon application using Form 44 – Application to Stay a Decision . How Does QCAT Handle Building Disputes? Building disputes are one of the most common matters brought before QCAT in Queensland. These disputes often involve disagreements over defective work, delays in project completion, payment issues, or breaches of contract between homeowners and builders. To resolve building disputes: Lodge an application with supporting evidence such as contracts or inspection reports. Participate in mediation or compulsory conferences if required. Attend hearings where tribunal members assess evidence and make binding decisions. Given the complexity of construction law matters, engaging an experienced construction lawyer can improve your chances of success. Why Should You Seek Legal Advice for Your QCAT Matter? Although self-representation is encouraged at QCAT proceedings, legal assistance can significantly enhance your chances of achieving a favourable outcome in complex cases like building disputes or appeals involving errors of law. A qualified lawyer can: Help you prepare your case thoroughly Present evidence effectively Navigate procedural requirements Don’t risk acting alone—legal matters can quickly become intricate and adversarial. Conclusion The Queensland Civil and Administrative Tribunal (QCAT) plays an essential role in providing accessible justice for Queenslanders across diverse areas such as building disputes, tenancy issues, consumer complaints, and more. Its focus on efficiency and cost-effectiveness makes it an attractive alternative to traditional courts while maintaining fairness in its decisions. If you’re considering bringing a matter before QCAT or appealing a decision made by the tribunal, seeking expert advice can make all the difference in achieving a favourable outcome. At Merlo Law, our experienced construction lawyers are here to guide you through every step of your case with professionalism and dedication. For tailored advice on your specific situation or assistance with navigating QCAT proceedings in Queensland, don’t hesitate to contact us . Let us help you secure the best possible outcome! This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

The Queensland Home Warranty Scheme (HWS) is a critical safeguard for homeowners undertaking residential construction or renovation projects. Administered by the Queensland Building and Construction Commission (QBCC) , this mandatory insurance scheme ensures financial protection against contractor insolvency, defective workmanship, and incomplete projects. With residential construction involving significant financial and emotional investment, understanding the HWS’s scope, limitations, and processes is essential for homeowners and builders alike. This detailed guide explores every facet of the scheme, from legislative foundations to recent reforms, equipping you with actionable insights to navigate Queensland’s construction landscape confidently. Introduction to the Queensland Home Warranty Scheme Historical Context and Legislative Framework The HWS was established under the Queensland Building and Construction Commission Act 1991 to address systemic risks in the construction industry, particularly contractor insolvency and substandard work. Prior to its introduction, homeowners faced significant financial exposure if builders abandoned projects or delivered defective outcomes. The scheme’s creation marked a pivotal shift toward balancing consumer rights with industry accountability. Key legislation governing the HWS includes the Queensland Building and Construction Commission Act 1991 , which outlines the QBCC’s role in administering the scheme, and the Domestic Building Contracts Act 2000 , which regulates agreements between homeowners and builders. These laws ensure contractors adhere to licensing requirements and contractual obligations, with non-compliance triggering penalties or licence suspension. Purpose and Objectives The HWS serves three primary functions. First, it provides financial protection by covering losses if a licensed contractor fails to complete work or rectify defects. Second, it promotes quality assurance by linking insurance eligibility to contractor licensing, incentivising compliance with building standards. Third, it offers a streamlined dispute resolution process through QBCC oversight, reducing the need for costly litigation. QBCC’s Role The QBCC acts as the scheme’s regulator, responsible for licensing contractors, collecting premiums, and maintaining the Home Warranty Insurance Fund. It investigates claims, authorises payouts for approved cases, and enforces rectification orders against non-compliant builders. The QBCC also maintains a public register of licensed contractors and insured projects, enhancing transparency for homeowners. 2. Scope of Coverage: What the HWS Includes Eligible Projects The HWS applies to residential construction work valued over $3,300, inclusive of labour, materials, and GST. Covered projects include new home construction, renovations, extensions, structural alterations, swimming pools, spas, and manufactured homes such as relocatable dwellings. Notably, standalone swimming pools and landscaping tied to primary construction are now included under recent reforms.Exclusions from the scheme include commercial developments like office buildings and retail spaces, temporary structures such as caravans, and work performed by unlicensed contractors. Additionally, defects caused by wear and tear, natural disasters, or pre-existing conditions are not covered. Types of Claims Non-Completion Claims Non-completion claims arise when a contractor cannot finish a project due to death, insolvency, licence cancellation, or unlawful abandonment. Homeowners must lodge these claims within three months of contract termination or two years from the work start date, whichever occurs first. The QBCC assesses the claim’s validity and pays the lesser of the reasonable completion cost or the contract price minus payments already made. Defective Work Claims Defective work claims cover structural and non-structural defects. Structural defects, such as foundation instability or non-compliant electrical installations, are covered for six years and six months from contract commencement. Non-structural defects, like cracked tiles or peeling paint, must be reported within seven months of project completion. Homeowners must first notify the contractor in writing, allowing 28 days for rectification, before escalating unresolved issues to the QBCC. Subsidence and Settlement Claims Subsidence and settlement claims address damage caused by ground movement linked to faulty construction practices, such as inadequate site preparation or drainage. These claims require evidence connecting the damage to the contractor’s work, often necessitating expert reports from engineers or soil specialists. 3. Financial Aspects: Premiums, Payouts, and Limits Premium Calculations Premiums are calculated as a percentage of the insurable value, which is the total contract price excluding GST. Current rates are 1.75% for contracts up to $200,000, 1.25% for contracts between $200,001 and $1,000,000, and 0.75% for contracts exceeding $1,000,000. For example, a $500,000 project incurs a premium of $7,250, calculated as 1.75% on the first $200,000 and 1.25% on the remaining $300,000. Payout Limits The standard coverage limit is $200,000 per claim, with an optional upgrade to $300,000 for high-value projects like luxury homes. Payouts are capped at the contract’s insurable value, even if rectification costs exceed this amount. This limitation underscores the importance of accurate contract valuation and contingency planning. Funding Model The HWS operates as a not-for-profit scheme, with premiums pooled into the Home Warranty Insurance Fund. Managed by the QBCC, this fund ensures liquidity for claims without relying on government budgets. The model promotes sustainability, with premium rates periodically reviewed to reflect claim trends and construction costs. 4. Recent Reforms and Proposed Changes 2022 QBCC Review Outcomes A comprehensive review identified gaps in the HWS, leading to expanded eligibility for standalone swimming pools, manufactured homes, and work within a building’s “envelope,” such as painting and minor upgrades. Enhanced transparency measures now require mandatory disclosure of HWS terms in contracts and public access to the Home Warranty Register for property buyers. Proposed 2025 Reforms Pending legislation aims to extend coverage to prefabricated and modular homes, reflecting industry trends toward off-site construction. Risk-based premiums may reward contractors with strong compliance records through reduced rates, while stricter consumer rights provisions could mandate Product Disclosure Statements (PDS) and allow claims for latent defects discovered post-sale. 5. Navigating Claims: A Detailed Walkthrough Step 1: Pre-Claim Preparation Homeowners should gather contracts, invoices, defect photographs, and communication records. Verifying the contractor’s licence status via the QBCC Online Register is crucial, as claims involving unlicensed contractors are automatically rejected. Step 2: Lodging a Non-Completion Claim Eligibility requires a fixed-price contract, as cost-plus agreements lack the certainty needed for QBCC assessment. Submitting Form 30 – Notice of Claim for Non-Completion alongside evidence of contractor insolvency or abandonment initiates the process. The QBCC appoints a claims officer to verify validity and, if approved, engages a new contractor to complete the work. Step 3: Managing Defect Claims For structural defects, homeowners must engage a QBCC-licensed inspector to assess severity before submitting Form 32 – Notice of Claim for Defective Work . Non-structural defects require dated photographs and a detailed defect list. The QBCC may issue a Direction to Rectify, compelling the original contractor to address the issue, or escalate unresolved disputes to the Queensland Civil and Administrative Tribunal (QCAT). 6. Common Pitfalls and How to Avoid Them Missed Timeframes Claims lodged outside statutory deadlines are automatically rejected. Homeowners should set calendar reminders for key dates, such as the seven-month window for non-structural defects. Incomplete Documentation Insufficient evidence delays assessments. Maintaining a dedicated folder for contracts, invoices, and defect records ensures readiness for claim submissions. Overpaying Contractors Paying more than the legal deposit limit (20%) voids HWS coverage. Adhering to the contract’s payment schedule mitigates this risk. 7. The Role of Legal Professionals in HWS Disputes Why Engage a Construction Lawyer? Construction lawyers assist with contract reviews to ensure HWS terms are correctly incorporated, strengthen claim submissions with legally sound evidence, and represent homeowners in QCAT or court proceedings. 8. Conclusion: Maximising Your HWS Protections The Queensland Home Warranty Scheme remains indispensable for mitigating construction risks, but its effectiveness hinges on proactive engagement. By understanding coverage limits, adhering to timeframes, and seeking legal advice early, homeowners can safeguard their investments against unforeseen setbacks. Need Assistance? Merlo Law’s building construction lawyers specialise in HWS disputes, offering end-to-end support from claim preparation to tribunal representation. Contact us today to ensure your rights under the scheme are fully enforced. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.