The Construction Contracts Act 2002 (the Act) provides a process for dealing with payments and disputes under a construction contract.

The Construction Contracts Act 2002:

• protects retention money withheld under commercial construction contracts
• helps to ensure a fair, balanced and appropriate payment regime
• provides a fast and cost-effective adjudication process for people with disputes
• provides enforcement mechanisms to recover any unmade payments.

The Construction Contracts Act 2002 is available on the New Zealand Legislation website. The Construction Contracts Amendment Act 2015 (the CCAA) contains new requirements for protecting retention money.

Changes relating to retention money

Construction Contracts Amendment Act 2015

The Construction Contracts Amendment Act 2015 (CCAA) and the Regulatory Systems (commercial Matters) Amendment Act 2017 put in place new requirements for protecting retention money. From 31 March 2017, retention money withheld under commercial construction contracts must be held on trust in the form of cash or other liquid assets readily converted into cash, unless a financial instrument is purchased. These requirements apply only to contracts entered into, or renewed, on or after 31 March 2017.