{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Economic research and forecasting Economics Housing outlook Tailored market research Economic reports and data Inspiring Australia's building professionals HOUSING The only place to get your industry news Media releases Member alerts Submissions See all
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder and manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies and tool insurance Planning and safety services Building and planning services How can HIA Safety help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan HR Docs Trusted legal support Legal advice and guidance Professional services Industrial relations
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials and products Concrete, bricks and walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Hear what our apprentices say Advice for parents and guardians Study with us Find a course Get your builder's licence Learn with HIA
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Get involved Become an award judge Join a committee Partner with us Get to know us Our members Our people Our partners Mates rates What we do Mental health program Charitable Foundation GreenSmart
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Australian Housing Awards Awards program National Conference Industry networking Events
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping and delivery Purchasing terms & conditions Products Building codes and standards Hard copy contracts Guides and manuals Safety and signage See all
About Contact Newsroom
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Change location
{{propApi.text}} {{region}} Change location
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Building and construction industry Security of Payment legislation

On 1 July 2010 Security of Payment (SOP) laws came into effect via the Building and Construction Industry (Security of Payment) Act 2009 (‘the Act’). These laws allow a contractor or builder to make a claim for non-payment for completed construction work and/or for the supply of related goods or services provided to a client or principal contractor.

Who can made a claim?

Strict procedures must be followed in order for a contractor or builder to recover unpaid monies or to defend a claim. The information below provides an overview of the new SOP laws in the ACT and how they can potentially affect HIA members.

What can I claim for?

You are entitled to claim for: 

  • construction work you have done 
  • construction materials or plant you have provided or hired out 
  • consulting services you have provided 
  • interest on overdue progress payments 
  • your losses and additional expenses due to work being deleted from your contract while you lawfully suspended work under these laws 
  • cash security and retention monies
  • at the end of a contract, a claim under the Act can be made for the final payment.

These laws allow you to make a progress claim and to receive a progress payment. There is an implied right given to make progress claims where a contract does not make adequate provision. If you make a claim you can seek payment of any unpaid amount by adjudication.

What is adjudication?

It is a process set up under these laws where an independent adjudicator will decide on the amount that is payable. Adjudication is a quick method to obtain a decision and is an alternative to taking court action. An adjudicator’s decision can be enforced as a judgement. 

What is the first step?

When you are entitled to make a progress claim, you give a payment claim to your client/principal (the respondent). Your claim must: 

  • be made at the time stated in your contract or, if no time is stated, then at the end of the month 
  • be in writing and addressed to the respondent 
  • describe the construction work, related goods or related services for which you are claiming 
  • state the amount that you claim is due 
  • include the words:
    “This is a payment claim under the Building and Construction Industry (Security of Payment) Act 2009 (ACT)”. 

To make a claim you must: 

  • establish the reference date for making a claim 
  • decide how much you are entitled to be paid, calculated to the reference date 
  • on or after each reference date make a written payment claim and serve it on the respondent (this will usually take the form of a tax invoice) 
  • serve the claim by delivering, posting or faxing it to the respondent (or via another form of service as specified in the contract)
  • record the date of service, which is the date the respondent receives the claim.

What happens next?

After you have given the respondent your payment claim, ONE of three things can happen: 

  1. The respondent pays you the exact amount that you have claimed 
  2. The respondent gives you a payment schedule 

Within 10 business days of receiving your claim, the respondent may give you a written statement of the amount it is prepared to pay, with the reasons for not paying the difference. This is known as a ‘payment schedule’ and the amount that the respondent is prepared to pay is known as the ‘scheduled amount’.

If you are given a payment schedule, you may:

  • accept the scheduled amount that the respondent has agreed to pay in their payment schedule, and
  • recover the unpaid portion of the claimed amount from the respondent as a debt due to the claimant in any court of competent jurisdiction, or
  • apply in writing to an Authorised Nominating Authority (ANA) for an adjudication. The application must be made within 10 business days after receiving the payment schedule.

The respondent is limited in any adjudication from raising any defence not set out in the payment schedule. 

If the respondent gives you a payment schedule stating the amount they are prepared to pay, they must pay that amount before the due date to which the payment relates. If they don’t, you can: 

  1. suspend the works by giving a notice to the respondent (this notice must state that it is made under the ‘Building and Constructions Industry Security of Payment Act’) 
  2. commence legal proceedings in a court of law to recover the full amount claimed by you as a debt or go to adjudication (see below). 

Also, if the respondent does not pay you the scheduled amount (as above) they will not be allowed to bring any cross-claim against you or to raise any defence in any legal proceedings that you bring about against them. (However, this restriction will not apply in adjudication.) 

  1. The respondent fails to pay in full or fails to give a payment schedule at all 

If the respondent does not pay the full payment claim or does not give you a payment schedule within 10 business days after you have given them your written claim, you can suspend the works after giving the respondent notice and you will be able to hold onto any unfixed plant and materials supplied by you to the respondent. 

You will also be able to commence legal proceedings in court to recover the full amount claimed by you as a debt or go to adjudication (see below). 

If the respondent does not pay the full amount or give you a payment schedule they will not be allowed to bring any cross-claim against you or raise any defence in any legal proceedings that you bring about against them. (However, this restriction will not apply in adjudication.) 

Where there is no payment schedule, then before an adjudication application is made here, you must give the respondent a written notice telling them that you intend to apply for adjudication of the payment claim and they have five business days to provide you with a payment schedule. If after notice is given to the respondent you have not received a payment schedule from the respondent with five business days, you can then apply for adjudication. 

Note: Keep all written notices

Evidence of all written notices sent and received should be kept. This may include confirmation reports, registered mail receipts etc., as well as the original notices sent to the respondent.

What happens if the respondent fails to pay the adjudicated amount? 

You can ask the body that appointed the adjudicator to give you an adjudication certificate. This certificate can be filed in the appropriate court as a judgment. You must support the certificate with an affidavit stating that the adjudicated amount is still outstanding. 

To find out more, contact HIA's Workplace Services team

Email us

Share with your network:

More articles on:

{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find guides, how-tos, resources and more

Managing your business


Can’t find what you need, check out other resources that might be closer to the mark.

Explore resources

Contracts Online 

The industry’s go-to digital platform. 

No matter the size of the job, a watertight building contract is critical to protect your business, and the current climate presents a great opportunity to go digital with your contracts.

Take me there