The Building and Construction Industry (Security of Payment) Act 2021 (Act) retention trust scheme now applies to all new construction contracts entered into with a value of AU$20,000 or more in Western Australia.
The trigger threshold has been lowered from AU$1 million, and the scheme will now affect a much larger number of construction contracts.
From 1 February 2024, construction contracts valued at AU$20,000 or more will be subject to the retention trust scheme under the Act (save for minor exceptions). Parties cannot contract out of the scheme. The scheme applies if money is withheld from payments under a construction contract as performance security or if money is paid by a party to be retained as performance security. It does not apply if the performance security under the construction contract is not cash retention, e.g. bank guarantee or performance bond.