Payments in the building industry

The building and construction industry has legal obligations and processes to follow to protect the payments of contractors.

The Building Industry Fairness (Security of Payment) Act 2017 was passed to ensure everyone gets paid for the work they do.

Read more about industry obligations to protect payments and what actions people can take if payment is late or they don't receive it.

Email securityofpayment@hpw.qld.gov.au with queries about these requirements.

Paying contractors

Progress payments

To get paid, a contractor must submit a payment claim (which may be an invoice). This is a written request for payment for construction work or related goods and services delivered under a construction contract.

When a respondent receives the payment claim, they must either pay in full or give the contractor a payment schedule within a specific time frame.

Read more about payment claims and payment schedules.

Project bank accounts

For certain building projects, payments may need to be made using a project bank account.

A project bank account (PBA) is a set of 3 trust accounts where funds are held in trust for head contractors and subcontractors until payments are due.

These accounts secure progress payments, disputed funds and retention funds until they're paid to a subcontractor.

Head contractors must determine whether they need a PBA for their building contract, based on set criteria, and then establish and operate the PBA according to strict rules.

Read more about project bank accounts.

Payment disputes

Adjudication

Adjudication is a dispute resolution process to help resolve disagreements about progress payments and money owed. It's a quick, cost-effective alternative to court.

If there's a dispute about an amount owed, the contractor can make an adjudication application to the Adjudication Registrar.

The Registrar refers the application to an adjudicator to consider the disputed payment claim. The adjudicator's decision is enforceable in a court.

Read more about the adjudication process.

Subcontractors' charges

A subcontractors' charge provides a way for subcontractors to secure payment of amounts owed to them under a contract by someone higher in the contractual chain.

To claim a subcontractors' charge over money payable, the subcontractor issues a notice of claim form. The principal must then respond to the claim and retain money that is, or will be, payable to the subcontractor to satisfy the claim.

Subcontractors should always seek legal advice before submitting a notice of charge.

Read more about subcontractors' charges.

Note: A contractor can't use both subcontractors' charges and adjudication; they must pick one. Read more about the various dispute resolution options.

Financial reporting

Licensees must report their financial information, or continued compliance with the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 and minimum financial requirements (MFR) policy, at certain times.

Under the MFR Regulation, licensees must declare their revenue and net tangible assets every year.

These laws enable the Queensland Building and Construction Commission (QBCC) to better detect and mitigate the effect of potential insolvencies and corporate collapses. This protects everyone working in Queensland's building and construction industry.

Read more about minimum financial requirements for licensees.

The MFR Regulation introduced a range of changes to reporting requirements for licensees. Read about changes to the reporting requirements.

QBCC powers

The QBCC has powers to uphold compliance, and protect consumers and licensees who do the right thing.

Read about the QBCC's powers to regulate and protect the industry.

Changes to the legislation

The Building Industry Fairness Reforms were developed under the Queensland Building Plan 2017 to improve security of payment for subcontractors.

This included:

Some of these changes have been implemented and others are being introduced over time.

Read more about the reforms and the time frames for their implementation.

Contact

General enquiries 13 QGOV (13 74 68)