Security of payments and performance security

Performance security is a common requirement in construction contracts, but many contractors are unclear about when security must be released and what rights they have if funds are withheld. Understanding the rules can help ensure you recover bank guarantees, bonds or retention money as soon as your contractual obligations have been met.

 

This article explains how performance security claims operate under Victoria's Building and Construction Industry Security of Payment Act 2002 (Vic), including the deadlines for making a claim, the information a valid claim must contain, and the obligations placed on principals and head contractors once a claim has been received. 

Learn what happens when a performance security claim is disputed, when security can be lawfully retained, and the enforcement options available if a respondent fails to release the security. This practical guide helps contractors understand their rights and avoid costly delays in recovering funds. 

What does it include? 

• What is a performance security?
• Timeframe of making a valid performance security claim
• Security claims procedure
• Timeframe to release the security
• Respondent disputing or failing to serve a response
• Retaining amounts from the performance security.