Builder Owes You Money? How to Send a Letter of Demand in Australia

You paid a deposit. The builder started work — or maybe never showed up at all. Now they are not returning calls, the job is half-finished, and your money is gone. Sound familiar?

This happens to thousands of Australians every year. Whether it is a major builder like Bathla Group, Metricon, or a local sole trader, the recovery process is the same: you need a formal Letter of Demand before you can take any further action.

Why a Letter of Demand comes first

Australian tribunals (QCAT, VCAT, NCAT, SAT) expect you to have attempted resolution before filing an application. A Letter of Demand creates the paper trail that proves you gave the builder a fair chance to fix the problem or refund your money.

Without one, a tribunal member may adjourn your case and tell you to go back and try to resolve it first. That wastes weeks.

A properly drafted Letter of Demand also triggers legal obligations under the Australian Consumer Law and state-specific building legislation. It puts the builder on notice that you know your rights and are prepared to escalate.

What your Letter of Demand should include

A Letter of Demand to a builder must include:

• The builder’s full legal name — check their ABN on the ASIC register. If they are a company (Pty Ltd), address the letter to the company, not just the person.
• The exact amount owed — deposit paid, progress payments for incomplete work, cost of rectification by another builder, any other losses.
• What happened — a factual chronology. When you engaged them, what was agreed, when work stopped, what is incomplete or defective.
• The legislation — Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010), your state’s Home Building Act or equivalent, and any relevant licensing requirements.
• A deadline — typically 14 days to pay or remedy the breach.
• Consequences — what you will do if they do not comply (tribunal application, QBCC/Fair Trading complaint, statutory demand if they owe over $4,000).

Real examples of builder disputes

These are the kinds of situations where a Letter of Demand is the right first step:

• Deposit taken, no work started — the builder took $15,000 and never came back. You are owed the full deposit.
• Work abandoned mid-project — the kitchen is half-demolished, the builder has moved on to another job. You need the cost to complete with another tradesperson.
• Defective work — the bathroom leaks, the tiling is uneven, the roof was not sealed properly. The builder refuses to come back and fix it.
• Cost blowout with no variation agreement — the builder invoiced $40,000 more than the quote with no written variation signed by you.
• Unlicensed work — the builder was not properly licensed for the work performed, which may void their right to payment entirely under some state Acts.

What happens after you send the letter

They know that if you file with a tribunal, it costs them time, money, and potentially their licence.

If the builder pays — matter resolved. If they offer a payment plan — consider a Payment Plan Agreement to lock it in writing. If they ignore it — you now have the paper trail to file a tribunal application or lodge a complaint with your state’s building authority (QBCC in Queensland, Fair Trading in New South Wales, the Building and Plumbing Commission (formerly the VBA) in Victoria).

How much does it cost?

Most template services charge $79–$199 for a generic template you fill in yourself.

Claim Done drafts your Letter of Demand for $49 flat fee. You answer a few questions, tell us what evidence you have, and the letter is drafted citing the specific legislation that applies to your situation — then sent directly to the builder. Done in about 5 minutes, 24/7.

Do not wait

The longer you wait, the harder it becomes to recover money from a builder. Companies can be deregistered, individuals can declare bankruptcy, and limitation periods apply (typically 6 years for contract claims, but shorter for some building defect claims).

If a builder owes you money, send the Letter of Demand today. It is the single most effective first step you can take.