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NSW · Security of Payment Act 1999

Say nothing, and you’ve agreed.

A builder or trade has handed you a payment claim — a demand for payment carrying one line that names an Act. That line started a clock. You have 10 business days to answer it in writing, and if you don’t, you owe the full amount and lose the right to argue about the work at all. Not paying is not the same as disputing.

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10 business days

To serve a written payment schedule in reply. Weekends, public holidays and 27–31 December don't count.

The whole amount

Stay silent and you become liable for everything claimed — whether or not the work is finished or any good.

No defence

In the recovery proceedings that follow silence, you cannot raise a defence about the work, or cross-claim.

First question: is your clock actually running?

Not every document that asks for money starts one, and plenty of people panic over a document that has no statutory force at all — or miss one that does. Six questions, answered honestly, and you'll know which you're holding.

    If you are answering it, the reply has to do four things

    A payment schedule is not a letter saying you're unhappy. It is a defined document, and the Act is strict about what it has to contain.

    1. Identify the payment claim it responds to

      Enough that there is no doubt which claim you are answering — their reference, the date, the amount claimed.

    2. State the amount you propose to pay

      A number, even if that number is nil. "We'll come back to you" is not a scheduled amount, and a schedule without one may not be a schedule at all.

    3. Say why it is less than they claimed

      If your number is lower than theirs, the schedule must indicate why.

    4. Give every reason you are withholding payment

      Each one. Defects, incomplete work, back-charges, delay, materials never delivered, the variation you never approved, an unlicensed contractor, a missing insurance certificate — all of it, in this document.

    And this is the part that catches people. Section 20(2B) is blunt: the respondent cannot include in an adjudication response any reason for withholding payment unless it was already in the payment schedule. Not "we mentioned it on site", not "they know full well" — if the reason isn't in the document, it cannot be put. Worse, s 20(2A) means that if you served no schedule at all you cannot lodge a response in the first place. A schedule written in an hour to get it off your desk is the ceiling on every argument you will ever be allowed to make about this claim.

    Before you rely on this

    They are counted from the date you entered, in business days as the Act defines them — weekends, NSW public holidays and 27–31 December excluded.

    Three things this cannot know.

    When the claim was actually served. Day zero is the day it reached the other party — not the day it was written, dated or sent. If that is in doubt, every date above moves with it.

    What your contract says. A contract can shorten the payment schedule window and can bring the due date forward. It cannot push payment out beyond the Act — except on an owner-occupied home, where it can.

    Whether the claim is valid at all. Licensing and insurance can remove the entitlement to payment entirely, and that is not a date question.

    These deadlines are unforgiving: miss one and the right is usually gone, not merely weaker. This is general information about NSW law, not advice about your matter. If a date above is close, get advice before you rely on it.

    The instinct that costs the most: “I’ll just hold the money until they fix it”

    It is the most natural response in the world, and on a normal invoice it is a reasonable one. Against a payment claim it is the single worst thing you can do — because the Act treats your silence as agreement, and hands them a debt they can enforce without ever having to prove the work was any good.

    The defects don't stop being real. You simply lose the forum in which to raise them. Withholding money is the argument you cannot make; the payment schedule is the argument you can.

    Ten business days is not long when the document has to carry every reason you will ever be allowed to give.