Mechanical and HVAC subcontracts in Western Australia: what to check before you sign
In Western Australia, a mechanical subcontract is read alongside the Building and Construction Industry (Security of Payment) Act 2021 (WA), which caps subcontract payment terms at 25 business days. The contract itself still decides the risks that cost mechanical and air conditioning subcontractors most: design and fitness-for-purpose obligations; plant lead times; commissioning at the end of the programme.
AI risk report, not legal advice. The scanner gives general information about the risks in a document. It is not a lawyer, does not know your circumstances, and can be wrong. For decisions with legal consequences, get advice from a construction lawyer.
Western Australia rules that override your contract
Statute: Building and Construction Industry (Security of Payment) Act 2021 (WA)
- Payment terms for subcontractors are capped at 25 business days after the payment claim. A longer term in the contract doesn't change that.
- If the builder disputes a payment claim, it has to answer with a payment schedule within 15 business days (or any shorter period in the contract).
- Two regimes run in parallel: contracts entered into from 1 August 2022 sit under the 2021 Act (East Coast model), while older contracts stay under the Construction Contracts Act 2004 with its 90-business-day adjudication window. The contract date decides which set of rules you're under.
- Adjudication: under the 2021 Act, through authorised nominating authorities; under the old CCA 2004, an application must be made within 90 business days of the payment dispute arising.
- A retention trust scheme is phasing in.
Where mechanical and air conditioning subcontractors lose money
Design and fitness-for-purpose obligations
Design and construct mechanical packages often carry a fitness-for-purpose warranty that goes beyond reasonable skill and care, and that kind of risk is usually difficult to insure. Read whether you are warranting performance outcomes or just your design.
Plant lead times
Chillers, air handling units and controls can have long lead times. Without an extension of time for supply delays outside your control, a factory delay becomes your liquidated damages.
Commissioning at the end of the programme
Commissioning needs power, finished ceilings and controls integration from others. If your completion depends on whole-building commissioning, you carry everyone else's delay.
Long defects and seasonal testing
Seasonal commissioning can push final testing out a year. Check how that interacts with your retention release and defects period so money isn't held twice.
Three things to push for in your departures schedule
- Design warranty limited to reasonable skill and care, not fitness for purpose
- Extension of time for plant supply delays outside your control
- Completion of your works defined by your own scope and tests
The free scanner finds these clauses in your actual contract in about two minutes and writes the departures schedule for you.
What the Index says
Live figures from the Australian Subcontract Index, 90 real subcontracts. The Index holds no mechanical and hvac contracts so far, under the 10-contract threshold, so these are national figures across all trades. Nothing under 10 contracts is ever shown.
Mechanical and HVAC subcontracts in other states
Mechanical and HVAC subcontracts in WA: common questions
How long does a builder in WA have to pay a mechanical and hvac subcontractor?
No more than 25 business days after your payment claim, whatever the contract says. If the builder disputes the claim, it has 15 business days to answer with a payment schedule giving its reasons.
What is the biggest risk in a design and construct mechanical subcontract?
Usually the design warranty. A fitness-for-purpose obligation makes you responsible for the system achieving an outcome even where you used proper skill and care, and that risk is usually difficult to insure. Push for a reasonable skill and care standard.
Where do WA mechanical and hvac payment disputes go?
Building and Energy, WA (DEMIRS), authorised nominating authorities. Timing: under the 2021 Act, through authorised nominating authorities; under the old CCA 2004, an application must be made within 90 business days of the payment dispute arising.
Is this legal advice?
No. It is general information about common subcontract risks and the state's payment law as recorded in our registry. Statutory details change; check the current Act, and take the scanner's report to a construction lawyer for decisions with legal consequences.
General information, not legal advice. Statutory details are taken from our state law registry and change over time; verify them against the current Building and Construction Industry (Security of Payment) Act 2021 (WA) before relying on them. Built by Mat Kennedy, Founder, The Construction Contracts Co.