Security of Payment timing for owners: the clock starts the day the claim lands.

Why this legislation exists, and why it bites owners

Security of Payment legislation was written to stop builders and subcontractors going broke while waiting to be paid. It does that by giving anyone who has done construction work a statutory right to a progress payment, a fast process for getting it, and a heavy penalty on the party that does not respond. The penalty is the part owners underestimate: if the owner does not respond to a payment claim in the way and within the time the Act requires, the owner becomes liable to pay the full amount claimed. Not the amount that was fair. The amount on the claim.

That is true whether the work was done well, done badly or not done at all. The Act does not ask. It asks whether a payment schedule was served in time. The time is short, and the contract can make it shorter.

New South Wales and Queensland: the numbers that matter

In New South Wales the governing Act is the Building and Construction Industry Security of Payment Act 1999. A valid payment claim can generally be served on and from the last day of each month, and the owner must serve a payment schedule within 10 business days of receiving it, or within a shorter period if the contract says so. Payment of a progress claim by a principal to a head contractor is due within 15 business days of the claim, or earlier if the contract provides, on commercial projects.

In Queensland the governing Act is the Building Industry Fairness (Security of Payment) Act 2017. The owner must give a payment schedule within 15 business days of receiving the claim, or within a shorter period if the contract says so. Payment is due on the date the contract provides, or 10 business days after the claim if it does not, and for a commercial building contract Queensland legislation voids any term that allows longer than 15 business days. Failing to give a schedule in time is also an offence in Queensland.

Two things follow. First, the statutory period is a ceiling, not a target. Australian Standard contracts frequently set a shorter period for the superintendent to certify, and the shorter period governs. Second, business days exclude weekends, public holidays and, in most cases, the Christmas shutdown period the Act defines. A claim served on the last Friday of the month is not a claim you can leave until next month's board meeting.

What a payment claim is, and how to recognise one

A payment claim is a written claim for a progress payment that identifies the work it relates to, states the amount claimed, and, in New South Wales, states that it is made under the Act. In Queensland the endorsement is no longer required, which means any invoice from a builder or subcontractor that identifies the work and the amount can be a payment claim. Owners in Queensland should treat every builder's invoice as one.

A claim from a head contractor must also be accompanied by a supporting statement about payment of its subcontractors, in both states. In New South Wales a head contractor must not serve a claim without one; in Queensland the omission is an offence for the builder but does not affect the validity of the claim. Either way it is a question for advice on the day, not a reason to ignore the document.

The practical rule is simple. Anything that arrives from the builder with a dollar figure and a description of work is diarised the day it arrives, and the response period is counted from that day.

What a payment schedule must say

The payment schedule is the owner's answer. It identifies the claim it responds to, states the amount the owner proposes to pay, and, where that amount is less than the amount claimed, states the reasons. The reasons matter as much as the amount. If the dispute later goes to adjudication, the owner is generally limited to the reasons stated in the schedule. A schedule that says "amount not agreed" has given away every argument the owner might have had.

A proper schedule sets out, item by item, why the certified amount differs: work not done, work defective, variation not directed, rates not in accordance with the contract, retention or security to be deducted, liquidated damages to be set off, backcharges. Under AS 4000 the superintendent must issue a progress certificate within the period the contract sets, stating the moneys due and the reasons for any difference from the claim, and on most projects that certificate is served as the payment schedule.

One more point owners miss: serve a schedule even when you intend to pay the claim in full. Neither Act requires it where the claim is paid in full by the due date, but it closes the period, records the position, and stops any argument about what was agreed.

What happens if you miss the period

If no schedule is served in time, the claimed amount becomes a debt the builder can recover in court, and in those proceedings the owner cannot raise a defence under the contract or bring a cross claim. In New South Wales a builder who goes to adjudication instead must first give notice of its intention, which opens a further window of five business days for a schedule. That window exists; relying on it is a mistake, because it is shorter still and the builder controls when it opens. Queensland gives no second window, and an owner who gave no schedule cannot respond to the adjudication at all.

If a schedule is served but the builder disputes it, the builder can apply for adjudication. An adjudicator decides the amount payable, quickly, on the papers. The owner's response is confined to what the schedule said. Adjudication is not the end of the road on the underlying rights, which can still be litigated later, but the owner pays the adjudicated amount now and argues afterwards. For most owners that is the wrong way round.

What good administration looks like

1. The claim dates are diarised on day one of the contract. Not the first claim, the contract. The superintendent knows the day of the month claims are expected and the last day a schedule can issue.
2. Every claim is logged the day it is received, with the date, the amount and the response deadline, in the register the board sees.
3. The assessment starts immediately: measurement against work done, contract sum, variations and retention. Waiting for the builder's supporting documents is not a reason to let the period run.
4. The schedule issues inside the shorter of the contract period and the statutory period, with reasons stated item by item, and is served in the way the contract requires.
5. Payment follows on the due date, for the scheduled amount, not the claimed amount.
6. One person holds the pen. Under an Australian Standard contract that is the superintendent. Staff, consultants and directors do not agree amounts with the builder on site, because the Act will treat those conversations as the owner's position.

Questions for the board before the first claim

• What period does our contract give the superintendent to certify, and is it shorter than the Act?
• Who receives payment claims, physically and by email, and does the clock start when they are on leave?
• Who issues the schedule, and does anyone else have authority to agree an amount with the builder?
• Where is the register, and who reports the claim position to the board?

Answered before the first claim, those questions take an hour. Answered after a missed schedule, they take a lawyer.

This article is general information about the Security of Payment legislation in New South Wales and Queensland as it applies to owners under commercial building contracts. It is not legal advice. The Acts are amended from time to time, timeframes differ for residential and subcontract work, and the executed contract may set shorter periods. Take advice on any live claim.

Sources. Building and Construction Industry Security of Payment Act 1999 (NSW); Building Industry Fairness (Security of Payment) Act 2017 (Qld); Queensland Building and Construction Commission Act 1991; AS 4000-1997 General conditions of contract, incorporating Amendments 1 to 3 (Standards Australia). Checked against the current versions on 9 September 2026.