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24 August, 2016 | Peter Smith
On 1 September 2016, the meaning of construction work shall include:
a) design or engineering work carried out in New Zealand in respect of work of the kind referred to already in the CCA in subsections 1(a) to (d) and (f);
b) quantity surveying work carried out in New Zealand in respect of work of the kind referred to already in the CCA in subsection 1(a) to (g).
This will mean that professionals such as architects, designers, quantity surveyors and any other contractors that deal in design or engineering work may have the additional protection of the CCA from 1 September 2016.
On 31 March 2017, a new section will be added into the CCA which will deal with the retention of monies by a party to a construction contract which is held as security for performance of the obligations of the other party to the contract (“retention money”).
This section will provide the parties with a greater clarification and direction in relation to what happens to retention money. The introduction of a new subpart in the CCA will clarify:
The CCA will not apply to any construction contract that was entered into before 1 September 2016 unless:
a) The Contract has been renewed for a further term on or after 1 September 2016 (in which case that section applies only in relation to those obligations that were incurred or undertaken on or after 1 September 2016); or
b) the parties agree that the meaning of construction work as amended by the Construction Contracts Amendment Act 2015 will apply.
Therefore, architects, engineers and quantity surveyors and any other contractor that deals in design, should revisit their standard terms and payment systems to make sure they are in line with the CCA.
There are stringent requirements under the CCA for the issue of compliance payment claims and, where applicable, payment schedules. A payment claim must be accompanied by an outline of the process for responding to that claim and an explanation of the consequences of not responding to a payment claim and not paying the claimed amount or scheduled amount in full.