Security of Payment claims in NSW: a quick guide

Late payment is one of the biggest problems in the construction industry. In NSW, the Building and Construction Industry Security of Payment Act 1999 provides a fast statutory process designed to keep cash flowing, without waiting for a court case.

Who can use it?

Generally, a person who has carried out construction work, or supplied related goods and services, under a contract may be able to claim payment under the Act. This includes builders, contractors, subcontractors and suppliers. Some types of work are excluded, such as certain residential building work for owner-occupiers.

How the process works

1. Payment claim. The claimant serves a payment claim that identifies the work, states the amount claimed and requests payment. Ideally it states that it is made under the Act.
2. Payment schedule. The party who received the claim must respond with a payment schedule within the time limit, generally 10 business days, setting out what it will pay and why it is withholding any amount.
3. If there is no payment schedule. If the respondent does not provide a payment schedule and does not pay, the claimant may be able to recover the amount claimed as a debt or move to adjudication, as the Act allows.
4. Adjudication. If the claim is disputed, the claimant may apply for adjudication. An independent adjudicator decides the amount payable, usually within a matter of weeks.
5. Enforcement. An adjudication determination can be enforced, including by filing it as a judgment.

Strict time limits

The Act operates on short deadlines, many measured in business days, and a missed deadline can limit your rights. A payment claim must also be made within a set period after the work was carried out. Because the requirements are technical, it is important to prepare and serve payment claims and schedules correctly.

Common mistakes

• Serving the claim late or on the wrong party
• Failing to respond to a payment claim on time
• Not providing reasons in a payment schedule
• Missing the adjudication deadline

Frequently Asked Questions

Does the Act replace my contract?

No. It operates alongside the contract and provides a faster interim payment process.

What if I receive a payment claim?

Respond within the time limit. Failure to respond can leave you liable for the full amount claimed.

Can I still sue later?

In many cases, yes. The adjudication result is an interim position, and the parties' contractual rights may still be pursued.

Do I need a lawyer?

The process is technical and deadline-driven, so early legal advice is recommended.