SOPA under review

What you need to know about the Draft Building and Construction Industry (Security of Payment) Amendment Bill 2025

On 2 October 2025 the WA Government released the draft Building and Construction Industry (Security of Payment) Amendment Bill 2025 (the Draft Bill) as well as the supporting draft regulations, for public consultation. The Draft Bill introduces a number of key changes to the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOPA), particularly:

1. the introduction of a new ‘construction trust’ scheme to replace Project Bank Accounts (PBAs) on State Government projects;
2. the ability for a principal (being a State agency or a GTE¹) to withhold payment where a head contractor has failed to provide a head contractor statement; and
3. removal of time restrictions for serving adjudication documents.

Construction trusts

The most notable of the proposed amendments in the Draft Bill is the introduction of ‘construction trusts’ to replace the current Project Bank Account (PBA) model. The Draft Bill introduces a scheme (known as ‘construction trusts’) to replace the existing use of PBAs on State Government construction projects.

The proposed amendments would apply once the law comes into effect to eligible State Government contracts valued at $1,500,000 or more.²

The construction trust scheme proposed in the Draft Bill:³

• eliminates the upfront administrative burden associated with PBAs under the SOPA;
• clarifies legal rights in the event of head contractor insolvency and remove the need for subcontractors to register security interests; and
• offers choice and flexibility for head contractors to use any bank transaction or deposit account as a trust account for the purpose of the scheme.

Payment Withholding – where a head contractor has failed to provide a head contractor statement

The Draft Bill provides that where the principal of a contract is a State Agency or a GTE, the head contractor will be required to submit a head contractor statement when submitting a claim. The statement must confirm (amongst other things) whether the head contractor has paid the full amount claimed by each subcontractor in connection with the contract. Where a head contractor fails to submit this statement, the principal (State Agency or a GTE) may withhold payment claimed by the head contractor.

Revised requirements relating to adjudication documents

The current scenario under the SOPA is that parties are required to provide other parties with copies of adjudication documents within 1 business day after the documents are provided to the adjudicator.  The Draft Bill proposes to remove this requirement so that the adjudication application is not invalid merely because the service requirement is not complied with. The same proposed amendment applies to provisions in the SOPA in respect of parties’ requirements to provide the adjudication response, adjudication review application, adjudication review response.  These proposed amendments clarify that an application for adjudication (or adjudication review) or adjudication response (or adjudication review response) are not invalid merely because a copy is served on the other party out of time, which has traditionally been an issue of contention in adjudication proceedings.

Parliament’s intention behind the proposed amendment

Parliament’s intention behind the proposed amendments in the Draft Bill is to strengthen and streamline subcontractor protections on State Government funded construction projects and to improve certainty of payment for all parties in the construction chain who are involved in the project.

The Draft Bill and regulations are open for public comments until 14 November 2025.

Thank you to Ike Adesanya, Solicitor, for her valuable research and assistance with this article.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.

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