What does the law say about retention in construction?
Retention is money held back from progress payments as security for the work. Where a state's law puts duties on holding or releasing it, they are below, read from the obligation library with the section cited. The library holds retention duties for New South Wales, Queensland and Western Australia, and none for the other 5 states.
Retention duties, state by state
Each row is a duty from an Act or regulation, with the instrument linked. A row is here when its duty names retention or the library files it against the retention register.
| State | Instrument | Duty | Window and section | If missed |
|---|---|---|---|---|
| New South Wales | Security of Payment Regulation 2020 (NSW) | Maintain the retention trust ledger | 3 monthsSecurity of Payment Regulation 2020 | an offenceLapsed compliance |
| Queensland | BIF Act 2017 | Notify the retention trust account within 5 business days | 5 business daysss 35, 40A, 40B | an offenceLapsed compliance |
| QBCC Act 1991 | Hold no more retention than the statutory cap | none setss 67K-67N | the claim is barredDisputes | |
| QBCC Act 1991 | Recover retention within 12 months of the defects period ending | 12 monthsss 67NA, 67NB | an offenceDisputes | |
| QBCC Act 1991 | Challenge a set-off from retention within 28 days | 28 dayss 67J(2) | the claim is barredMissed claims | |
| Victoria | not held in the library | |||
| Western Australia | Building and Construction Industry (Security of Payment) Act 2021 (WA) | Keep trust account records for 36 months | 36 monthss 79(5) | an offenceLapsed compliance |
| South Australia | not held in the library | |||
| Tasmania | not held in the library | |||
| Australian Capital Territory | not held in the library | |||
| Northern Territory | not held in the library | |||
Security held against the contract
Performance security (a bank guarantee or similar) is the other half of what a principal holds. These are the duties the library holds on recourse to it and its release.
| State | Instrument | Duty | Window and section | If missed |
|---|---|---|---|---|
| New South Wales | not held in the library | |||
| Queensland | not held in the library | |||
| Victoria | Building and Construction Industry Security of Payment Act 2002 (Vic) | Have no recourse to a performance security until 5 business days after written notice of intention | 5 business dayss 17H | the claim is barredMissed claims |
| Building and Construction Industry Security of Payment Act 2002 (Vic) | Claim release of a performance security by the last day of the month after the defects liability period ends | none sets 17A-17C | the claim is barredMissed claims | |
| Western Australia | Building and Construction Industry (Security of Payment) Act 2021 (WA) | Notify recourse against security within 5 business days | 5 business dayss 57 | the claim is barredMissed claims |
| South Australia | not held in the library | |||
| Tasmania | not held in the library | |||
| Australian Capital Territory | not held in the library | |||
| Northern Territory | not held in the library | |||
When the windows run
Retention windows run at the end of the job, after the crews have gone and nobody is counting. Each row above names the disease the library files it under. The rest of the payment sequence is on the state comparison.
What this page is, and is not
It is the section text this library holds for each state's Act, with the window and the consequence. It is not legal advice, and it is not a substitute for reading the Act and the contract you signed.
No library of law is complete, and Demiton never says this one is. An obligation the library does not hold, and you did not add, is not protected. You can add your own to any job.