Jennifer Raphael, Senior Legal Writer, Practical Guidance Construction, LexisNexis®
In the ever-evolving landscape of construction law, 2025 promises to be a pivotal year for legal practitioners in Australia. As the industry braces for significant legislative changes and the impact of recent High Court decisions, it is crucial for lawyers to stay informed and prepared. This blog post delves into the 2025 anticipated developments in construction law across New South Wales, Victoria, and Queensland, providing a comprehensive overview of the key changes and their implications for legal professionals.
The year 2024 marked a significant period for construction law, highlighted by several High Court decisions such as Pafburn Pty Limited v The Owners-Strata Plan No 84674 [2024] HCA 49 and Tesseract International Pty Ltd v Pascale Construction Pty Ltd [2024] HCA 24. Additionally, critical decisions from state supreme courts and courts of appeal addressed issues related to security for payment, including A-Civil Aust Pt Ltd v Cerose [2024] NSWCA 7 and MWB Everton Park Pty Ltd as trustee for MWB Everton Park Unit Trust v Devcon Building Co Pty Ltd [2024] QCA 94.
For further guidance in relation to these decisions see – Security of Payment – 2024 Key Decisions.
2025 is shaping up to be a similarly significant year in construction law with key legislative changes on the horizon.
New South Wales
Looking ahead to 2025, New South Wales is set to introduce the draft Building Bill released by Building Commission NSW in 2024 into parliament.
If passed, the act will consolidate several pieces of legislation including the Design and Building Practitioners Act 2020 and the Home Building Act.
The bill is yet to be finalised and is currently awaiting feedback from industry and other stakeholders. However, the NSW government has announced its intention to introduce the bill into parliament in 2025 following this consultation process.
Some of the key changes include:
- introducing a comprehensive licensing framework for builders and in particular extending licensing requirements to commercial builders;
- expanding the duty of care in the DBP Act to all types of buildings;
- overhauling the certification process; and
- introducing mandatory continuing development for professionals, builders and tradespersons.
It remains to be seen what the final version of the bill to be introduced into parliament will be and what impact it will have on the industry.
Victoria
In Victoria, the government has endorsed several recommended changes to the Building and Construction Industry Security of Payment Act 2002 (VIC) (VIC SoP Act) outlined in the Environment and Planning Standing Committee’s report.
Some of the critical changes expected to be implemented at some point this year include:
- removing the concept of “reference dates”, instead allowing at least one payment claim per month and expressly allowing for a payment claim to be made on termination of the construction contract;
- removing the sections relating to “excluded amounts”;
- including provisions declaring notice-based time bar clauses as “unfair” and prohibiting certain other unfair contractual clauses;
- extending the time limits for claiming payment from three to six months; and
- prohibiting respondents from providing “new reasons” in their adjudication response.
Other changes are only partially supported, including the establishment of a statutory trust scheme.
The changes recommended by the standing committee’s report aim to reform the construction industry’s payment practices by aligning with national standards and improving the effectiveness of the VIC SoP Act.
The Victorian Government is expected to release further details on the proposed changes this year.
Queensland
The Queensland Government has once again delayed the final rollout of the statutory trust regime under the Building Industry Fairness (Security of Payment) Act 2017 (QLD) (QLD SoP Act).
The Qld SoP Act requires the establishment of a project trust account for eligible projects.
Presently, a project trust account is required for:
- state government, hospital and health services contracts where the contract price is $1 million or more; and
- local government and private sector projects where the contract price is $10 million or more.
It was expected that the scheme was to be extended as follows:
- From 1 March 2025, the scheme was to be extended to apply to local government and private sector projects where the contract price is $3 million or more;
- From 1 October 2025, the scheme was to be extended to all contracts with a contract price of $1 million or more across public and private sectors.
The reason for the deferral has been expressed to be:
- Financial pressures on builders;
- The risk of insolvency;
- The lack of awareness and education in the industry; and
- Lack of available software to ensure compliance.
The rollout of these final phases of the scheme has been deferred on multiple occasions. It is unknown when the final rollout is to occur.
The Queensland Productivity Commission (QPC) is reviewing these regulations and will assess whether the final phases of scheme will be rollout or whether further adjustments to the scheme are necessary.
If the final rollout does occur, the scheme will impose significant obligations on a broader range of construction projects and the industry will need to be prepared.
Practical Guidance Construction Law
For legal practitioners, staying abreast of these upcoming developments is essential. LexisNexis offers extensive resources, including Practical Guidance Construction, to support lawyers in navigating the complexities of construction law in 2025 and beyond. This tool provides step-by-step guidance, case law, legislation, and practical materials to aid in both commercial and residential construction matters. Learn more here.