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Understanding Your Rights Under Progress Payment Claims
NSW homeowners: Learn your legal options when builders issue progress claims under Clause 17 of the HIA Lump Sum Contract.
You can be confident that you are getting the right legal advice.
As a NSW homeowner, progress claims from your builder can be confusing and stressful. Understanding your legal obligations and rights under Clause 17 is essential to protect your interests and avoid costly mistakes. Get clear, practical guidance on payment schedules, dispute resolution, and your options when progress claims arise.
BOOK YOUR FIRST FREE CONSULTUnderstanding Progress Claims
As a homeowner under Clause 17 of the NSW HIA Lump Sum Contract, you are likely to receive progress claims from your builder during the course of your construction project. A progress claim is a request for payment that a builder submits to a homeowner or principal contractor for work completed up to a certain point in time. Progress claims are a common feature of the construction industry and are designed to ensure that builders receive payment for work as it progresses.
It is important to note that a progress claim is not the same as a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), although a progress claim may also constitute a payment claim. Progress claims are usually accompanied by a payment schedule, which is a document that outlines the amount the respondent proposes to pay in response to a payment claim. Understanding the process of progress claims and payment schedules is essential to ensure that you are fulfilling your obligations under the HIA contract and the Act, whilst protecting your rights as a homeowner.
BOOK YOUR FIRST FREE CONSULTLegal Obligations for Builders and Homeowners under Clause 17
Clause 17 of the NSW HIA Lump Sum Contract outlines the legal obligations for builders and homeowners regarding progress payments. Under this clause, builders have the right to claim progress payments as work is completed, and homeowners are obligated to make payments on time within the timeframes specified in the contract.
If the builder fails to issue a progress claim, the homeowner may request a payment claim. If a progress claim is disputed, the homeowner must provide a payment schedule outlining the reasons for withholding payment. The payment schedule must be provided within 10 business days of receiving the payment claim, unless your contract specifies a different timeframe, to preserve your right to dispute. Failure to provide a payment schedule within the required timeframe may result in the homeowner being liable to pay the claimed amount. It is crucial for homeowners to understand their obligations and seek professional advice if there are any concerns about progress claims or payments to protect their legal position.
BOOK YOUR FIRST FREE CONSULTYour Legal Options as a Homeowner
As a homeowner under the NSW HIA Lump Sum contract, you have legal options if you believe that the builder is not entitled to payment for a progress claim. Firstly, you can issue a payment schedule within the required timeframe and state your reasons for withholding payment. This is a critical step that protects your right to dispute the claim.
If the builder has failed to provide a progress payment schedule in compliance with the contract requirements, they may become liable to pay the claimed amount to you. Builders must properly document all completed work stages and provide supporting evidence with each progress claim to justify the payment amount requested under Clause 17. If the builder disputes your payment schedule, you can apply for adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW). Alternatively, you can seek legal advice and pursue other options, such as mediation or court proceedings. It is important to understand your legal rights and options before taking any action, as strict timeframes apply and missing deadlines can significantly affect your position.
BOOK YOUR FIRST FREE CONSULTThe Progress Claim Process
The progress claim process is initiated when a builder serves a progress claim to the homeowner, seeking payment for work performed or materials supplied. Homeowners should ensure that the progress claim is compliant with the requirements set out in the NSW HIA Lump Sum contract, and is made under the Building and Construction Industry Security of Payment Act 1999 (NSW).
Upon receiving a progress claim, the homeowner may respond by providing a payment schedule to the builder within the time limits set out in the contract. Before making payment, homeowners should verify that the claimed work stage has been completed to the required standard and matches the progress payment schedule percentages. The payment schedule must clearly state the amount the homeowner proposes to pay (if any) and the reasons for withholding any portion of the claimed amount. If the builder is not satisfied with the scheduled amount, they may seek adjudication under the Security of Payment Act. Homeowners may also seek legal advice to determine their options and rights regarding the progress claim process, ensuring they comply with statutory obligations whilst protecting their interests.
BOOK YOUR FIRST FREE CONSULTStandard Progress Payment Schedule in NSW
In NSW, the standard progress payment schedule is typically set out in the HIA Lump Sum Contract. Clause 17 of the contract outlines the stages at which progress payments are due, and the percentage of the total contract price that is payable at each stage. The schedule generally includes the following stages:
- Deposit - usually 5% of the total contract price
- Base Stage - when the foundations and base of the building are completed, usually 15% of the total contract price
- Frame Stage - when the building's frame is completed, usually 20% of the total contract price
- Enclosed Stage - when the building is "enclosed," which means that the external walls, roof, and windows are installed, usually 25% of the total contract price
- Fixing Stage - when the building's internal fixtures and fittings are installed, usually 20% of the total contract price
- Practical Completion - when the building is complete, except for minor defects, usually 10% of the total contract price
- Final Inspection - when any defects are rectified, usually 5% of the total contract price
It is important for both homeowners and builders to understand the progress payment schedule, as it sets out the agreed-upon payment structure for the construction project. The schedule provides clarity on when payments fall due and helps prevent disputes about payment timing. Homeowners should carefully review each stage to ensure work has been completed to the required standard before making payment. Homeowners have the right to inspect work at each stage and may withhold payment if work does not comply with the contract specifications or Australian Standards.
BOOK YOUR FIRST FREE CONSULTCommon Progress Claim Disputes Under Clause 17
Progress claim disputes frequently arise when builders and homeowners disagree about payment entitlements under Clause 17. Understanding common dispute scenarios helps you protect your rights and prevent costly legal conflicts.
Dispute 1: Work Quality Below Standard - Builders claim payment for completed stages, but homeowners identify defective workmanship, incomplete tasks, or non-compliance with contract specifications. You have the right to withhold payment proportionate to defects identified.
Dispute 2: Premature Payment Claims - Builders submit progress claims before reaching the contractual completion stage. Clause 17 requires specific work milestones before payment becomes due. Verify stage completion against your contract schedule.
Dispute 3: Inflated Claim Amounts - Payment claims exceed the percentage outlined in your progress payment schedule. Cross-check claimed amounts against Clause 17 percentages to ensure accuracy and contractual compliance.
Dispute 4: Inadequate Documentation - Builders fail to provide supporting evidence, photographs, or detailed breakdowns justifying the claimed amount. Request proper documentation before making payment to protect your legal position.
Understanding these common disputes empowers you to respond appropriately to progress claims and protect your financial interests throughout your construction project.
Security of Payment Act in NSW
The Security of Payment Act 1999 (NSW) provides a quick and cost-effective dispute resolution process for construction payment claims. It applies to construction contracts in NSW, including the NSW HIA Lump Sum contract. Under the Act, a builder can issue a payment claim, and the owner must respond within a set timeframe.
If the owner disputes the claim, they must provide a payment schedule stating the amount they are willing to pay and their reasons for withholding payment. The payment schedule must be provided within the statutory timeframe - typically 10 business days from receipt of the payment claim, unless the contract specifies a different period. Missing this deadline means you lose your right to dispute the claim and become liable for the full amount, even if the claim is excessive or includes incomplete work. If the matter remains unresolved, either party may seek adjudication to resolve the dispute. The Act ensures that builders are paid promptly for work performed and that homeowners have a fair opportunity to dispute any claims they believe are not valid, provided they comply with the strict procedural requirements.
BOOK YOUR FIRST FREE CONSULTHow to Respond to a Disputed Progress Claim
When you receive a progress claim you believe is incorrect or excessive, responding correctly within statutory timeframes is critical to protecting your legal rights and financial position.
Step 1: Review Claim Against Contract - Within 24 hours of receiving the progress claim, review it against your Clause 17 payment schedule, contract specifications, and work completion evidence. Document any discrepancies with photographs and written notes.
Step 2: Prepare Payment Schedule - Draft a written payment schedule within 10 business days stating the amount you propose to pay and detailed reasons for withholding any portion. Reference specific contract clauses, incomplete work items, or quality concerns.
Step 3: Serve Payment Schedule Correctly - Serve your payment schedule to the builder using the method specified in your contract, ensuring proof of delivery. Keep copies of all correspondence and delivery confirmation for potential adjudication proceedings.
Step 4: Seek Legal Advice Immediately - Contact a construction lawyer to review your payment schedule before serving it, ensuring compliance with the Security of Payment Act 1999 (NSW) and protecting your right to dispute the claim.
Failing to respond within statutory timeframes or serving an inadequate payment schedule can result in liability for the full claimed amount, regardless of whether the claim is valid. Early legal advice prevents expensive mistakes and protects your financial interests under Clause 17.
John Dela Cruz
Principal Lawyer, Contracts Specialist
Why Choose Contracts Specialist
When you work with Contracts Specialist, you receive legal advice directly from John Dela Cruz — Principal Lawyer with over 17 years of exclusive construction law experience.
John is an Australian Legal Practitioner and he services NSW, Queensland, Victoria, and Tasmania. He has dedicated his entire legal career to specialise in construction law. As a former Divisional President of the Master Builders Association NSW, he combines deep legal expertise with comprehensive industry knowledge. He maintains daily experience in building dispute tribunals (NCAT, VCAT, QCAT, TASCAT) and courts across multiple jurisdictions.
Unlike generalist lawyers who handle various legal matters, John specialises exclusively in construction law matters affecting homeowners, builders, contractors, and subcontractors. You receive focused expertise from a lawyer who understands both the legal framework and the practical realities of the building industry.
Frequently Asked Questions About Progress Claims Under Clause 17
What is the difference between a progress claim and a payment claim under the Security of Payment Act?
A progress claim is a request for payment under your building contract (such as Clause 17 of the NSW HIA Lump Sum Contract) based on completed work stages. A payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) is a statutory claim that triggers specific legal timeframes and processes. A progress claim can also be a payment claim if it meets the requirements of the Act. The key difference is that payment claims under the Act carry strict procedural requirements and consequences if not responded to correctly within the statutory timeframes.
How long do I have to respond to a progress claim from my builder?
Under the NSW HIA Lump Sum Contract and the Security of Payment Act 1999 (NSW), you typically have 10 business days from receiving a payment claim to provide a payment schedule. However, this timeframe may differ if your contract specifies an alternative period. It is critical to respond within the required timeframe, as failure to provide a payment schedule can result in you being liable to pay the full claimed amount, even if you dispute it. If you're uncertain about the deadline, seek legal advice immediately.
What should I include in a payment schedule if I dispute a progress claim?
A payment schedule must clearly state the amount you propose to pay (which may be zero) and provide detailed reasons for withholding any portion of the claimed amount. Your reasons might include: work not completed to the required standard, variations not properly authorised, amounts claimed exceeding the contract value for that stage, or defects in the work performed. The payment schedule must be in writing and served on the builder within the statutory timeframe. It's advisable to seek legal advice before preparing a payment schedule to ensure it complies with all requirements.
Can I withhold payment if I'm concerned about defects in the builder's work?
Yes, you can withhold payment for legitimate reasons including defective work, but you must follow the correct process. You must provide a payment schedule within the required timeframe stating the amount you will pay (if any) and the reasons for withholding payment, including details of the defects. Simply not paying without providing a payment schedule can result in serious legal consequences, including liability for the full claimed amount. It's important to document defects with photographs and written descriptions, and to seek legal advice about the appropriate amount to withhold.
What happens if my builder applies for adjudication after I issue a payment schedule?
If your builder is not satisfied with your payment schedule, they can apply for adjudication under the Security of Payment Act 1999 (NSW). You will then have an opportunity to lodge an adjudication response setting out your reasons for disputing the claim. An independent adjudicator will review the payment claim, your payment schedule, and the adjudication response, and make a determination usually within 10 business days. The adjudication process is designed to be quick and cost-effective compared to court proceedings. If you receive an adjudication application, it's important to seek legal advice immediately as strict timeframes apply.
What are my options if I believe the builder's progress claim significantly exceeds the value of work completed?
If you believe a progress claim is excessive, you should first issue a payment schedule within the required timeframe stating the amount you're prepared to pay and your reasons for the reduced amount. Your reasons should reference the contract payment schedule and explain why the claimed amount exceeds the value of work completed. You may also wish to obtain an independent assessment from a building consultant or quantity surveyor to support your position. Consider seeking legal advice to understand your rights and ensure you're following the correct process. Options may include negotiation, mediation, or defending any adjudication application the builder makes.
Do I need a lawyer to respond to a progress claim from my builder?
Whilst you're not legally required to engage a lawyer to respond to a progress claim, seeking legal advice is highly recommended, especially if you intend to dispute the claim or withhold payment. The Security of Payment Act 1999 (NSW) and the HIA contract contain strict procedural requirements and tight timeframes. A mistake in your payment schedule or missing a deadline can have serious financial consequences, potentially making you liable for the full claimed amount even if the claim is unjustified. A construction lawyer can review the progress claim, advise on your legal position, help you prepare a compliant payment schedule, and represent you in any subsequent adjudication or dispute resolution process.
Get Expert Legal Advice on Your Progress Payment Dispute
Progress payment disputes can escalate quickly, and strict legal timeframes mean you need to act fast to protect your rights. As a NSW homeowner, understanding your obligations under Clause 17 of the HIA Lump Sum Contract and the Security of Payment Act 1999 (NSW) is essential to avoid costly mistakes.
At Contracts Specialist, we provide specialist construction law advice exclusively - no generalist dabbling. With over 17 years of experience handling progress payment disputes, payment schedules, and adjudications across NCAT and NSW courts, we help homeowners like you navigate complex payment claim processes with confidence.
Your free first consultation gives you direct access to Principal Lawyer John Dela Cruz - not a junior associate. We'll assess your progress claim situation, explain your legal rights, and outline your options clearly in plain English. You'll understand exactly where you stand before making any decisions.
Don't risk missing critical deadlines or making procedural errors that could cost you thousands. Book your free consultation today and get the specialist construction law advice you need to protect your interests.
Take Action to Protect Your Legal Rights
Clause 17 of the NSW HIA Lump Sum Contract sets out the legal obligations for both builders and homeowners regarding progress payments. As a homeowner, you have legal options if you believe the builder is not entitled to payment or if a progress claim is excessive or incorrect.
It is important to understand the progress claim process and the standard progress payment schedule in NSW. You should also be aware of the Security of Payment Act 1999 (NSW), which provides protections for contractors and subcontractors who are not paid on time, whilst establishing strict procedural requirements for homeowners responding to payment claims.
Seek professional advice from a solicitor or construction lawyer to help you understand your legal rights and explore your options. Early advice can prevent expensive disputes, protect your financial position, and ensure you comply with all statutory obligations under NSW building law.