Here is the low-down on how Security of Payments applies to Home Building work.

For builders it is really quite alarming.

For contractors, if you are using Security of Payments software or have received legal advice, you now have powerful ammunition in your artillery to get paid.

If you’re familiar with my work, you will know that one of my big bug-bears is people in the building and construction industry being ripped off. Did you know our industry makes up over 20% of all insolvencies in Australia? More often than not, the culprits for non-payments were builders ripping off contractors.

However, in recent times I have noticed that the tables have turned. Home Builders can thank their bigger commercial builder friends for the sword that the Government has given contractors to use against builders.

Unfortunately, if you are a home builder, when it comes to Security of Payments law, you have the worst of all worlds. You do not have rights under the Security of Payments law against your ‘mum and dad’ clients. However, your contractors have the benefit of the Security of Payments law against you.

And if you thought you had too much paperwork before, the Government has added a lot more to your pile. Failing to comply with your Security of Payments obligations to issue payment schedules means you automatically owe your contractor for their payment claim. This is why it is important to understand how to write a Payment Claimhow to make a Payment Claim, and the difference between Progress Claims, Tax Invoices, and Payment Schedules.


Any questions? Call us at Small Builders on: 02 0896 8576. We’d be happy to talk you through it.