Who we act for

Builders and subcontractors

Money that has not arrived, a variation that is being refused, or a defects list that has turned into a threat. This page sets out where you stand and what has to happen first.

General information, not legal advice. This page sets out how the law generally applies. It does not take account of your circumstances, and you should get advice about your own situation before acting on it. The official sources this page is written from are listed on it; where they differ from anything here, they are the authority.

Last updated: 23 September 2026

Being owed money on a construction job is not like being owed money anywhere else. You have usually already paid for the materials and the labour, the next job depends on this one being paid, and the party holding the money knows all of that.

New South Wales has a statutory answer to exactly that problem. It is fast, it is strict, and it rewards whoever handles the paperwork properly. This page covers that, and the other two things builders and subcontractors most often need advice about: variations, and defect allegations.

Getting paid: the statutory route

The Building and Construction Industry Security of Payment Act 1999 (NSW) gives a person who carries out construction work, or supplies related goods and services, a statutory entitlement to progress payments and a procedure for recovering them without waiting for the whole job to be argued out.

The sequence is short. A payment claim is served. The other side replies with a payment schedule saying what it proposes to pay and, where that is less than the amount claimed, every reason for withholding. If an amount remains in dispute, the claimant may apply for adjudication, and an adjudicated amount can be recovered as a debt.

The part that decides most matters is the form of the claim. A payment claim has to identify the work it relates to, state the amount claimed and state that it is made under the Act. A document that does none of those things may not be a payment claim at all, in which case nothing was started and no reply was required.

Our guide to what makes a payment claim valid goes through the requirements. The day counts are on the NSW Government’s Security of Payment pages, and they are the pages to read.

If a payment claim is served on you

Builders are on the receiving end as often as the serving end, and the consequences of a missed reply fall hardest on head contractors.

A respondent who does not provide a payment schedule within the period the Act allows can become liable for the full amount claimed, and in recovery proceedings can be prevented from raising a defence arising under the contract or a cross-claim. A reason left out of a payment schedule generally cannot be added later at the adjudication either.

So the reply is not a document to draft at the end of the month with the rest of the paperwork. Write down the date the claim arrived and how it arrived, and get the schedule drafted properly and in time.

Record the date and method of service, before anything else.
Check whether the document actually is a payment claim under the Act.
Draft a payment schedule with every reason for withholding in it, not just the main one.
Serve it within the period the Act allows for your situation.
If you have already missed it, take the documents to a lawyer the same week.

Variations and scope

The other half of most payment disputes is variations. Extra work is instructed on site, nobody prices it, nobody writes it down, and three months later both sides remember it differently.

For residential building work, changes have to be recorded in writing and signed. A contractor who did the work on a handshake is arguing uphill. That does not always mean the claim fails, but it moves the argument onto ground that costs money to fight on, and it hands the owner a position they have not earned.

The discipline that fixes this is boring and cheap: confirm every instruction by email the same day, price it before the work is done, and keep the site record. Photographs with dates, delivery dockets, diary notes. Those are what a variation claim is actually proved from.

See variations and scope disputes. If the extra work also delayed the job, claim the time as well as the money — see delay and extensions of time.

Answering a defects allegation

A defects list is not a judgment. It is an allegation, and it has to be tested item by item: is the work actually defective, is it within the scope you contracted for, was it caused by something outside your control, and is the owner still in time to complain about it.

For residential work the statutory warranties in section 18B of the Home Building Act 1989 are implied into the contract, and for contracts signed on or after 1 February 2012 proceedings on them must be started within six years for a major defect and two years for any other defect, measured from completion, with a further six months where loss becomes apparent in the last six months of a period — see NSW Government guidance. Those periods cut both ways, and they are the first thing to check when a list arrives about a job you finished years ago.

Respond in writing, item by item, and keep the response factual. Correspondence in a building dispute becomes evidence. A letter that concedes the wrong item, or that is written in temper, is difficult to undo and is likely to be read out later.

Offering to inspect and to rectify is usually sensible and is not an admission of liability, but how it is expressed matters. Get advice before you put a broad offer in writing.

Licensing, insurance and the practitioner schemes

Residential building work requires the right licence for the work being done, and for the work the Act covers the contractor must obtain home building compensation cover and give the certificate to the owner before starting work or taking any money, including the deposit. Getting that order wrong creates problems that are hard to fix afterwards.

For apartment buildings and other regulated buildings, the Design and Building Practitioners Act 2020 (NSW) adds registration requirements, regulated designs lodged on the NSW Planning Portal, and declarations that the work complies with the Building Code of Australia.

That Act also imposes a duty on a person who carries out construction work to exercise reasonable care to avoid economic loss caused by defects. It is owed to each owner of the land and to each subsequent owner, whether or not they had any contract with you, and it cannot be delegated to someone else.

Suspending work, and terminating

Stopping work because you have not been paid feels like the obvious response and is one of the easiest ways to turn a good claim into a bad one. Suspension has requirements, whether under the contract or under the Security of Payment legislation, and suspending without meeting them can put you in breach and expose you to the cost of someone else completing the job.

Termination is more serious again. An invalid termination is usually itself a repudiation, which is an expensive place to end up.

Both are steps to take advice on before you take them, not afterwards. A conversation beforehand is far cheaper than the litigation that follows the wrong move.

What to do this week

Five things, none of which requires anyone’s permission.

Check that your payment claims actually meet the Act's requirements. Fix the template once.
Record the date and method of service on every claim you serve and every claim served on you.
Confirm every instruction and variation in writing the same day, before the work is done.
Keep the site record: dated photographs, diary notes, delivery dockets, meeting notes.
If a payment claim has arrived and you have not scheduled, get advice now rather than at the end of the month.

Bring the contract, the claims and the dates to a first conversation. How we work sets out what happens next.