On 18 December 2024, the Legislative Council passed the Construction Security for Payment Ordinance (Ordinance). The Ordinance will be gazetted on 27 December 2024 and will come into effect eight months later, on 28 August 2025.
The Ordinance aims at addressing payment issues in the construction sector and enhancing protection for stakeholders. It seeks to ensure timely payments and reduce wage arrears for workers. It also anticipates a decrease in project costs over time as payment security improves.
The Ordinance will enforce fairer contractual payment terms and introduce a fast, cost-effective and binding adjudication mechanism for resolving payment disputes. It applies to main contracts worth at least $5 million for construction work and $0.5 million for related goods or services. Subcontracts along the supply chain are also included, regardless of their value. However, it excludes contracts for minor works on existing buildings.
The Government will work on various preparations, including registering Adjudicator Nominating Bodies (ANB) and training adjudicators, aiming to publish relevant documents and accept ANB applications by January 2025.
Deacons is well-equipped to manage matters under the Ordinance, with a team of qualified adjudicators ready to help you understand your legal rights and obligations to secure favourable outcomes. We welcome discussions on any issues or queries you may have regarding adjudication and the preservation and maintenance of documents, to help you navigate the new payment landscape in Hong Kong’s construction industry.
For further information, please contact:
Kwok Kit (KK) Cheung, Partner, Deacons
K.K.Cheung@deacons.com
