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Subcontractor Payment Rights:
How to Issue a Payment Withholding Request

Are you a subcontractor having trouble getting paid? You are not alone. There are many builders and tradies in the industry who are constantly struggling with the same situation.

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A payment withholding request can be a big help for your situation after you have applied for adjudication. Consult with Contracts Specialist and get a better understanding of where you stand legally.

Table of Contents

Under the Act, a claimant can serve a request to withhold payment. The principal contractor retains sufficient money to cover a claim out of money that is or becomes payable by the principal contractor to the respondent (the person on whom a payment claim is served).

Who can Issue this Request?

A claimant can only serve the request. He should make an adjudication application before he could issue it.

Who is the Principal Contractor?

The Act defines the principal contractor as…

‘A person by whom money is or becomes payable to the respondent for work carried out or materials supplied by the respondent to the person as part of or incidental to the work or materials that the respondent engaged the claimant to carry out or supply’.

In short, he is the one who engaged the respondent to do work.

Sydney Payment Withholding Document Icon | Contracts Specialist

How to Serve a Payment Withholding Request?

Be mindful to state the truth that the amount of money claimed is owed by the respondent.

The two documents must be served on the principal contractor. As the adjudication progresses, the claimant must also send a copy of the determination within 5 business days.

Payment Withholding Request Papers Icon - Sydney | Contracts Specialist

When the Principal Contractor Receives the Requests to Keep Payments

A principal contractor must act on any payment withholding requests that are received. He must retain unpaid money to the value of the adjudication application until:

  • The adjudication application for the payment claim is withdrawn; or
  • The respondent makes payment to the claimant under the payment claim; or
  • The claimant serves a notice of claim on the principal contractor under the Contractors Debts Act 1997; or
  • A period of 20 business days elapses after a copy of the adjudication determination is served on the principal contractor by the claimant.
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How to Get Payment Under Contractors Debt Act?

A subcontractor must:

  • First, a obtain a judgment from a Court that specifies a debt is owed by the Contractor to the Subcontractor; then
  • obtain a “Debt Certificate” from the Court (s7 of the Contractors Debt Act); then
  • serve a “Notice of Claim” on the Principal attaching a copy of the Debt Certificate (s6 of the CD Act).
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What You Can Do When the Contractor Refuses to Pay the Subcontractor

Take note of the basic steps you need to take if your head contractor refuses to pay you.

  • Apply for an Adjudication
  • Serve a Payment Withholding Request
  • Take a Legal Action

Talk one-on-one with building and construction lawyer John Dela Cruz of Contracts Specialist

A construction attorney can help you defend and enforce your legal rights. He can assist you with your adjudication application and serving your payment withholding requests.

With his extensive knowledge and experience dealing with construction matters for more than 10 years, you can be confident you are getting the right advice. His interests will always be aligned with yours.

Building Solicitor Sydney - John Dela Cruz Photo | Contracts Specialist

Why choose us?

  • Expert legal advice you can get right away
  • We only deal with Australian construction law matters
  • Contracts Specialist is committed to find the most efficient and cost-effective resolution for our clients

Consult with a construction law expert who can explain things to you in a way you will fully understand. Leave the legal terms to us. We will help you understand your rights.

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You can be confident that you are getting the right legal advice.

Contracts Specialist is a Sydney-based construction law firm that deals with Building DisputesConstruction Contracts, Debt Recovery, and Security of Payment. With Contracts Specialist, you are ensured that you are in good hands.