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Setting up a project bank account

New laws

The Building Industry Fairness (Security of Payment) and Other Legislation Act 2020 received assent on 23 July 2020.

This Act will replace project bank accounts with a new trust account framework, delivering a more streamlined framework. Read about the new trust account framework.

The following information only applies to project bank accounts for certain government contracts tendered after 1 March 2018 up to 28 February 2021.

Once the head contractor has determined that a contract needs a project bank account (PBA), they're responsible for setting it up.

A subcontractor doesn't need to set up a PBA unless they're a related entity to the head contractor (and engage a sub-subcontractor for the project).

This information is a summary on how to set up a PBA. For more details about the process, read the Head contractors guidelines (PDF, 981KB).

Before setting up a PBA

Before setting up a PBA, the head contractor needs to:

Setting up the PBA

In setting up the PBA, the head contractor must:

  • ensure the PBA they wish to set up is only for a single contract
  • establish the PBA within 20 business days of entering the first subcontract, or the date in the contract (for government contracts in Phase 1, must be established within 20 days of tender acceptance)
  • open 3 trust accounts at a financial institution with a Queensland branch – general trust account, retention trust account and disputed trust account (ensuring the word 'trust' is used in the account names)
  • advise the principal within 5 business days of opening it and give them or delegates viewing access using the S26 notice of trust account form (PDF, 71KB). (Note: subcontractors don't have viewing access.)

The head contractor can appoint a delegate to manage the PBA (with notifications to the principal and subcontractor) but remain liable for any acts or omissions. They will use the S42 power to delegate form (PDF, 714KB).

Choosing a financial institution

If the head contractor's financial institution isn't offering to set up PBAs, several other institutions can provide a PBA. They should do some research to find out what they offer and the fees and charges that may apply.

Dissolving a PBA

The head contractor can dissolve the PBA by closing the 3 trust accounts when either:

  • there are no subcontractor beneficiaries left in the PBA (i.e. all amounts, including retention or disputed amounts, have been paid in line with the subcontract)
  • only maintenance work is left under the contract.

Government contracts in Phase 1 require the head contractor to notify the principal about their intent to dissolve the PBA at least 5 business days before the accounts are closed.

Contact

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General enquiries: 13 QGOV (13 74 68)