Contract variations and project bank accounts
If building contract variations and amendments occur during a project, the project may then need a project bank account (PBA) even if it didn't need one at the start.
These amendments can include the variation of a contract or change in the contract price.
If a contract amendment or variation changes the nature of the building work or increases the contract price, the head contractor must consider whether a PBA is required.
Decide if a PBA is needed
If a contract amendment or variation occurs, the head contractor should discuss this with the principal or superintendent to decide whether a PBA is needed.
(For phase 1 of project bank accounts, the principal may only be the Queensland Government or a statutory authority if it has opted in.)
A PBA may be needed if:
- the contract price increases to more than $1 million, including GST, and the total sum of the contract variation is 30% or more of the original contract price
- the scale of residential building work changes to include 3 or more living units
- a head contractor engages a subcontractor where none had previously been intended.
The project doesn't need a PBA if there are fewer than 90 days between the day the variation is agreed and the day that practical completion would occur.
If a PBA is required
If the head contractor determines that a building contract needs a PBA due to variations or amendments, they must set it up within 20 business days of the agreed amendment or variation.
After the contract is amended, the head contractor must comply with Building Industry Fairness (Security of Payment) Act 2017 requirements from the date of the contract amendment. This includes paying all subcontractors only from the PBA.
Follow the steps and time frames for setting up a PBA.
For more about head contractor’s obligations, read the Head contractors guidelines (PDF, 981KB).