Project Bank Accounts
A Project Bank Account (PBA) is a set of three trust accounts where funds are held in trust for head contractors and subcontractors until payments are due, as part of a building project. The three accounts secure progress payments, disputed funds and retention money, until they are paid to a subcontractor.
Phase One of PBAs commenced on 1 March 2018 and applies to State Government funded projects valued between $1 million and $10 million (including GST). PBAs will need to be established by head contractors for each project.
Subject to a review of Phase One, PBAs will be rolled out to apply to all building projects with a contract value of more than $1 million (including GST). Dates for subsequent phases of PBAs have not yet been announced by the Queensland Government.
PBAs will not apply unless 50% or more of the contract is building work.
For more information on PBAs, the Department of Housing and Public Works has prepared guidelines, available here.
The head contractor must give the principal a Notice of Trust Account’s Opening, Closing or Name Change (PDF) within 5 business days of:
- Opening a trust account
- Changing the name of a trust account
- Closing a trust account.
The head contractor must also give the principal written notice that the PBA has been dissolved after closing the trust accounts.
Written notice should be provided using the method (email, fax or letter) specified in the contract or as agreed by both parties.
Project Bank Account Complaint Form
If you have a complaint about a PBA, you can lodge a Project Bank Account Complaint Form (PDF). Reasons for lodging a complaint may include:
- an issue with the opening or closing of a PBA
- an incorrect transfer of money to or from a PBA, or a discrepancy in the payment instruction
- a written notice or approved form not received in relation to a PBA
Notice of Project Bank Account before Entering Subcontract
Before entering into a subcontract, the head contractor must give the subcontractor notice of a PBA using the Notice of Project Bank Account before Entering Subcontract Form (PDF).
If the head contractor entered into a subcontract for the building contract before a PBA is required for the contract (e.g. a PBA may be required after a variation to the contract), the head contractor must give the subcontractor notice within 10 business days after the start date.
Principal to be Given Information about Subcontracts
After opening a PBA, the head contractor must give the principal a Principal to be Given Information about Subcontracts Form (PDF) within 5 business days of entering into a subcontract for the building contract.
During the subcontract, if there is a change to the subcontractor information, the head contractor must advise the principal of the updated information using the above form.
Notice of Related Entities
If a PBA is established and the head contractor subcontracts to a related entity, a Notice of Related Entity Form (PDF) must be completed by the Principal and provided to the QBCC within 5 business days.
If the subcontractor further subcontracts all or part of the work (i.e. to a sub-subcontractor), then the subcontractor will also be required to establish a PBA.
If a head contractor enters into a subcontract with a related entity, they must notify the principal contractor and the QBCC within 5 business days after entering into the subcontract using the Notice of Related Entities Form.
The principal contractor is then also required to notify the QBCC within 5 business days after they’ve become aware of the relationship.
A related entity may include:
- a family member, e.g. spouse; parent; grandparent; brother; sister; aunt; nephew; niece; head contractors or spouses’ child or grandchild; spouse of any family member
- a majority shareholder, director or secretary of the corporation (company) or related body corporate
- an individual who has an interest of 50% or more in the corporation.
- Beneficiary of a trust
- Related bodies corporate
If the principal contractor suspects that a related entity exists between the head contractor and a subcontractor, and they haven’t been advised, then they can lodge a Project Bank Account Complaint Form (PDF).
Notice of Principal Replacing Head Contractor as Trustee
If the contract is terminated at the default of the head contractor, or the head contractor enters into insolvency, the principal may step into the role of trustee. The principal is required to complete the Notice of Principal Replacing Head Contractor (PDF) notifying the head contractor that the principal will replace the head contractor as trustee of the PBA.
The head contractor must give the principal the information required to act as trustee of the PBA including:
- details of the relevant financial institution
- contact details for each subcontractors
- bank account details for each subcontractor
- a copy of the records of transactions.
The head contractor must also inform the relevant financial institution that the principal will act as trustee for the PBA.
The head contractor is still liable for any act or failure committed as trustee. As the acting trustee over the PBA the principal may make payments to a subcontractor or head contractor.
Power to Delegate
The head contractor may employ or engage an agent to do any act relating to the PBA on behalf of the head contractor and may also delegate their powers to anyone who resides in Queensland using the Power to Delegate Form PDF).
The delegation takes effect if the person accepts the delegation for the period stated in the form.
A copy of the form must be provided to the principal and the subcontractor.