Retentions regime providing protection for subs
A recent review into the construction retentions regime shows most of the sector is complying with the requirements, but there is more work to be done to ensure the protection of subcontractors, says Ministry of Business, Innovation and Employment, General Manager, Building System Performance, Anna Butler.
The report indicates a strong level of compliance and reasonable levels of knowledge. However, the report findings raise some concerns around enforceable penalties, co-mingling retention monies, and a lack of guidance for construction firms.
“More work is required to ensure subcontractors are protected across the board.
“The Minister of Building and Construction expects to make further announcements next year about what this work will entail.”
An independent review, conducted by KPMG, was commissioned by the Ministry of Business, Innovation and Employment to look into the effectiveness of the retention money provisions in the Construction Contracts Act 2002.
“Ensuring our builders, plumbers, electricians, and other tradies are protected in the unfortunate event of construction firm insolvency remains a top priority.
“Government and construction industry leaders are working together through the Construction Accord Transformation Plan to tackle the long term issues in the sector, including better risk management and fairer risk allocation.”
A full copy of the review of the retentions regime is available on the Building Performance website.