Financial Management questions

Retention means holding money as security for performance under the applicable arrangement. Distinguish it from disputing an amount or claiming a deduction or set-off. Defects do not automatically give you a right to withhold payment. Check the contract and law before holding money, including any rules about retention amounts, release or trust handling. Follow any required payment-response procedure and obtain prompt advice if entitlement is disputed.

Official sources:

• Queensland QBCC Act sections 46 and 47
• WA Security of Payment Act current version
• ACT Hiring a builder

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

What are Security of Payment laws?

Security of Payment Act (SOPA) laws are designed to ensure that contractors, subcontractors, consultants, and suppliers get paid promptly for construction work and related services. These laws exist in every Australian state and territory, though the details vary slightly.

They provide a legal framework for:

• Making and responding to payment claims

• Enforcing progress payments

• Resolving payment disputes quickly

• Preventing clients from unfairly withholding payment

Do SOP laws apply to residential builds?

Yes, but with important caveats:

• In NSW, as of 1 March 2021, SOP laws do apply to owner-occupier residential construction contracts, meaning if you're building or renovating your own home, you're covered.

• In other states and territories, coverage of contracts with owner-occupiers differs. Some schemes exclude them (for example, Queensland generally excludes contracts with a resident owner), while others apply. Check the current Act for your state or territory.

• SOP laws apply to contracts for building work, supply of materials, and related services, including design, engineering, and surveying.

What this means for homeowners and builders

• Builders and consultants can issue formal payment claims under SOP laws.

• Homeowners must respond within strict timeframes, usually by paying or issuing a payment schedule with reasons for withholding.

• If no response is given, the claimed amount may become a statutory debt, enforceable in court.

• SOP laws also allow for adjudication, a fast-track dispute resolution process.

Why it matters

For homeowners: You must understand your obligations under SOP laws to avoid legal consequences.

For builders: SOP laws offer a powerful tool to secure payment and manage cash flow.

For both parties: Clear contracts, documented variations, and timely communication are essential.

Security of Payment laws can apply to residential house builds, including owner-occupied projects in some states such as NSW, but coverage differs between jurisdictions. They protect the right to timely payment and offer legal remedies for disputes, but they also impose strict obligations, so it’s vital to understand how they work in your state.

A rate per square metre is only a rough early check, and no single rate is accurate across Australia. Rates change over time and vary with location, design, site conditions, finishes and what is included, such as site works, utility connections, approvals, fees and external works. Do not rely on a figure from an article. Use published cost guides, a quantity surveyor, and written quotes from builders and trades, and always check what each rate includes and excludes. Replace rates with accepted quotes as soon as you have them.

In MyBuildHub: enter your estimate as the starting budget, mark each line as an estimate or a firm quote, and replace estimates with quotes so the forecast improves as the project progresses.

Check yourself: a quantity surveyor, a current Australian construction cost guide, and written quotes.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

Compare each quote with your drawings and specification, line by line. Check what is included and excluded, the materials and who supplies them, and which compliance certificates are provided. Ask about preparation, access, clean up, waste removal and making good, and about allowances that could change the price. Ask each tradie to confirm in writing anything that is unclear, and get at least two or three written quotes for large jobs so you can compare scope as well as price. Check the licence on your state's register and ask for current certificates of insurance. Have a lawyer review the contract for larger jobs.

In MyBuildHub: record each quote against its budget line, note the exclusions, and mark the accepted one so your forecast shows the real cost.

Check yourself: your state licensing register, and your state consumer affairs or fair trading body.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

Your loan terms and lender's procedures determine how construction funds are released. Ask which stages, claims, inspections, contributions and approvals are required, and compare them with your building payment obligations. Check the conditions for owner-builder lending separately. A lender's inspection or drawdown approval does not itself certify the builder's workmanship or settle every contractual obligation. Arrange the process before committing to payment dates.

Official sources:

• CommBank construction loan guide lender example
• ACT Hiring a builder

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

A variation is a change to the agreed work, price or time. The rules depend on the contract and your state. Consumer Affairs Victoria says that, for domestic building contracts there, the parties must agree to changes in writing, including the new price and completion date, before the work is carried out. Other states have their own written requirements, so check yours. A good practice in any state is to agree the scope, price and time impact in writing before the work starts, have both parties sign, and update your budget and programme straight away. Work done without a signed variation is a common cause of disputes, so get advice before agreeing to pay or refusing to pay a variation claim.

In MyBuildHub: record each variation against its contract, update the forecast cost and Timeline, and save the signed variation in your project documents.

Check yourself: Consumer Affairs Victoria, your state fair trading body, and a lawyer.

This is general information only. It is not legal advice, and MyBuildHub is not a law firm. Laws differ by state and change over time. Speak to a lawyer or your state regulator about your situation before you sign or act.

There is no official or single right figure. How much you need depends on how complete your design is, how firm your quotes are, and how much is unknown about the site. A project with a finished design and firm quotes carries less uncertainty than one with unresolved design, unknown soil, or allowances still to be priced. A quantity surveyor, your lender and an experienced builder can help you set a figure for your project. Review the contingency against actual costs often, and do not spend it on upgrades.

In MyBuildHub: hold your contingency as its own budget line, and track how much has been used as variations and unexpected costs are recorded.

Check yourself: a quantity surveyor, your lender, and an independent financial adviser or accountant.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

Ask your lender for its current drawdown checklist and processing timeframe. It may need a claim, invoices, inspection or other documents. Allow for those steps when agreeing payment arrangements, but remember that a lender's processing delay does not automatically extend the date you must pay your builder or trade. If a payment may be late, raise it early and obtain advice on your contractual obligations.

Official sources:

• CommBank construction loan guide lender example
• ACT Hiring a builder

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

Keep the contract or order, invoice, approved adjustments and evidence of each payment together. Record the supplier, invoice number, amount, date and relevant budget item. Request receipts and appropriate tax invoices where applicable. Before using new or changed bank details, verify them directly through an independently obtained contact. A bank transfer record shows that money moved; it does not by itself prove the work was complete or the recipient was entitled to it.

Official sources:

• Scamwatch Business email compromise scams
• ATO GSTR 2013/1 Tax invoices

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

Consumer prices must comply with total-price rules, including applicable GST and unavoidable charges. Confirm the total payable and check the supplier's GST registration if GST is charged. A valid tax invoice has specific requirements; an ordinary invoice is not automatically a tax invoice. GST credits are not available for private or domestic purchases. Business, mixed-use and property-development arrangements need separate tax advice.

Official sources:

• ACCC Price displays
• ATO GSTR 2013/1 Tax invoices
• ATO GST consolidated guidance including private use

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

Both are allowances in a contract for things that are not selected or priced at signing. Consumer Affairs Victoria describes a prime cost item as a fitting included in the contract where the owner has not selected the actual item or the price is not known at signing, for example a basin. A provisional sum is an allowance for work or a service that cannot be priced at signing. If the actual cost is higher than the allowance, the contract price generally increases, and a margin may be added, depending on the contract. If it is lower, the difference is generally deducted. In Victoria the contract must list each item with a cost estimate breakdown, and the builder must give you invoices showing actual costs. Other states differ. Allowances that are set too low are a common cause of budget blowouts, so ask for realistic allowances, or specify and price items before signing.

In MyBuildHub: treat each allowance as a budget line marked as an estimate, then replace it with the actual cost when you choose the item, so your forecast shows the real position.

Check yourself: Consumer Affairs Victoria, QBCC, your state fair trading body, and a lawyer.

This is general information only. It is not legal advice, and MyBuildHub is not a law firm. Laws differ by state and change over time. Speak to a lawyer or your state regulator about your situation before you sign or act.

Request the lender's final drawdown checklist before completion. It may require specified invoices, inspections, insurance or completion evidence. These loan conditions are separate from the building contract and legal requirements for occupation. A lender's release of funds does not confirm that every defect has been fixed or every statutory requirement met. Check any payment obligation or dispute separately rather than assuming the lender's decision resolves it.

Official sources:

• CommBank construction loan guide lender example
• NSW Planning Portal post consent certificates

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

Check the claim against the contract, work completed, variations and allowance adjustments, and request an itemised explanation of any difference. Record your reasons for disputing it. Do not assume an ordinary invoice is outside security-of-payment legislation or that asking questions pauses a deadline. Coverage and response procedures vary by jurisdiction and contract. Obtain advice promptly about the amount due and any required payment schedule or dispute notice.

Official sources:

• NSW Changes to Security of Payment laws
• QBCC Request payment
• WA Security of Payment Act current version

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

Under Australia’s Security of Payment legislation, contractors and consultants have a legal right to receive progress payments, even if the contract doesn’t clearly state when payment is due. In such cases, the law provides a default payment timeframe.

Residential builds: default payment rules

• In NSW, if the contract is silent, payment is due 10 business days after the payment claim is served under the Building and Construction Industry Security of Payment Act 1999 (NSW).

• In Victoria, the default is also 10 business days, unless the contract sets a shorter period.

• In Queensland, the timeframe is 15 business days, unless otherwise agreed.

• Other states and territories follow similar principles, but the exact number of days may vary slightly.

These timeframes apply to valid payment claims made under the relevant SOP Act.

The claim must:

• Be in writing

• Identify the work or services provided

• State the claimed amount

• Be served in accordance with the Act’s rules

Why this matters

• If the homeowner doesn’t pay or respond with a payment schedule within the required timeframe, the claimed amount can become a statutory debt.

• The contractor may then pursue adjudication, legal action, or even suspend work under the Act.

Best practices

• Even if your contract is silent, assume SOP laws apply and act promptly.

• Use tools like My Build Hub to track payment claims and deadlines.

• If you're unsure about the due date, refer to the relevant state legislation or seek legal advice.

Bottom line: When a residential contract doesn’t specify payment timing, SOP laws kick in with strict default deadlines, usually 10 business days. Ignoring these can lead to legal consequences and project delays.

This table incorporates the major 2025 legislative reforms in VIC, recent regulatory changes in SA and ACT, and clarifies current NSW provisions for owner-occupiers and other claimants, with citations for each new or confirmed point. Copy-paste this directly into Word for further formatting as required.

The best template is one you keep up to date. Track four figures for each cost line: the budget, the committed amount (accepted quotes, orders and variations), the amount paid, and the amount still to pay. For materials, also record the supplier, the item, quantity, unit price, order and delivery dates, tax invoice number and whether GST is included. Update it whenever a quote, order or invoice arrives. Forecast to completion is what you have paid, plus committed amounts still to pay, plus your best estimate for anything not yet quoted. Speak to an accountant about GST and your records.

In MyBuildHub: record materials as budget lines, attach each tax invoice to its line, and review the forecast against your budget regularly.

Check yourself: an accountant, and the ATO for GST and record keeping.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

Under Australia’s Security of Payment (SOP) laws, a payment claim is a formal request for payment made by a contractor, consultant, or supplier for construction work or related services. To be valid, especially in residential builds, it must meet specific legal requirements:

Clear identification of the work or services provided

• Describe the work completed or goods/services supplied.

• Include dates, locations, and reference to contract milestones or stages (e.g. slab, frame, fixing).

• Be specific enough for the recipient to understand what they’re being charged for.

The claimed amount

• State the exact amount being claimed, including GST if applicable.

• This can be a progress payment, final payment, or variation.

Date of the claim

• Include the date the claim is served. This starts the countdown for the payment schedule response.

Statement under the Act (if required)

• In NSW and some other jurisdictions, the claim must include the phrase:

• “This is a payment claim made under the Building and Construction Industry Security of Payment Act [year]”

• This statement is essential for invoking the protections and timelines under the Act.

Supporting documentation (recommended)

• Attach invoices, timesheets, delivery dockets, or progress photos to support the claim.

• While not mandatory, this helps avoid disputes and speeds up approval.

Templates and tools

To simplify the process and ensure compliance:

• Standard payment claim templates are available from:

• State building authorities (e.g. NSW Fair Trading, QBCC)

• Industry bodies like HIA and Master Builders

• Legal and construction advisory firms

My Build Hub offers:

• Pre-loaded templates for payment claims and variation notices

• Auto-fill features based on your project data

• Tracking tools for claim dates, responses, and payment status

• Alerts for SOP deadlines and compliance checks

Using these tools helps ensure your claims are valid, timely, and professionally presented, reducing the risk of rejection or dispute.

Bottom line: A valid residential payment claim must clearly describe the work, state the amount, include the date, and reference the SOP Act where required. Templates and digital tools like My Build Hub make it easier to stay compliant and organised

Update the forecast of all committed and remaining costs and speak to your lender or a financial counsellor early. Before reducing scope, check the contract, approvals and cost of changing or stopping work. Arrange advice on keeping the site safe, protected and appropriately insured. Extra borrowing or termination can create further costs and obligations. Obtain financial and legal advice appropriate to your circumstances before committing.

Official sources:

• ASIC Moneysmart Problems paying your mortgage
• QBCC non completion and contract termination

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

A bill of quantities lists the work in your project, with a quantity, unit, rate and total for each item. A common structure groups the items by trade, then by category, then by item, so you can price and compare each trade's work. A quantity surveyor can prepare one from your drawings, or you can build your own from the drawings and specification. Check the units and what each rate includes, and mark allowances separately from firm prices. Use a template as a starting point only, because every project's scope is different.

In MyBuildHub: use your bill of quantities to set up your budget lines by trade, so quotes and invoices can be compared against them.

Check yourself: your quantity surveyor or designer.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

Check the lawful deposit, payment terms and any required insurance evidence before paying. Limits depend on the jurisdiction, work and contract value. Assess progress claims against the contract and applicable law, and independently verify bank details. Avoid agreeing to advances without checking whether they are lawful and protected. If you dispute a claim, act promptly: an ordinary invoice can trigger statutory payment procedures where the relevant law applies. Do not assume a disagreement pauses the deadline.

Official sources:

• NSW Contracts for residential building work
• CAV Deposits and payments for domestic building
• QBCC Request payment

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.