You have finished the job, the head contractor has not paid, and someone at the pub said “just put a caveat on the property”. Before you do that, read this. In Australia, subcontractors generally do not have a lien over the land they worked on, and lodging a caveat without a proper interest can cost you a lot more than the debt.
The short answer
- There is no general mechanic’s lien in Australia like there is in the United States.
- Lodging a caveat requires a “caveatable interest” in the land. An unpaid invoice is not one. Lodging a caveat without reasonable cause exposes you to damages (for example section 74P of the Real Property Act 1900 in New South Wales).
- What you do have are statutory tools that let you attach the money flowing from the owner or principal to the head contractor. That is usually more useful anyway.
Queensland: Subcontractors’ charges
Queensland is the one state with a real charge mechanism. Chapter 4 of the Building Industry Fairness (Security of Payment) Act 2017 (the old Subcontractors’ Charges Act) lets a subcontractor give a Notice of Claim of Charge to the person who owes money to the head contractor (usually the owner or principal). Once served, that person must hold back the claimed amount from the contractor. The charge attaches to the money, not the land. Deadlines are strict: the notice must be given within 3 months of practical completion of the subcontract work, and you must start court proceedings within one month of giving notice or the charge lapses.
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New South Wales: Contractors Debts Act
The Contractors Debts Act 1997 lets an unpaid subcontractor get a debt certificate from a court or tribunal (including via an adjudication under the Security of Payment Act) and serve a notice on the principal. The principal must then pay you directly out of money owed to the head contractor. Again, it grabs the cash flow rather than the property.
Victoria, Western Australia, South Australia, Tasmania, the Australian Capital Territory, the Northern Territory
No lien or charge regime for subcontractors. Your primary tool is the state’s Security of Payment Act, which lets you serve a payment claim, force a payment schedule and go to adjudication. Most SOP Acts also allow you to suspend work after giving notice if you are not paid, and some let you claim directly from the principal after an adjudication.
What about a lien over materials and equipment?
If you still physically hold goods you supplied or worked on, you may have a common law possessory lien and can keep them until paid. This does not apply to anything already fixed to the building. Do not go back and remove installed materials. That is trespass and possibly criminal damage, and it will wreck your claim.
Step-by-step: what actually works
- Check who you contracted with. Your claim is against the head contractor, not the owner, unless the owner engaged you directly.
- Serve a proper payment claim under your state’s SOP Act. This starts the clock.
- Send a letter of demand to the head contractor at the same time. Reference the SOP Act, the Contractors Debts Act or the BIF Act charge provisions as relevant, and state that you will notify the principal if unpaid.
- Notify the principal or owner if allowed in your state. Principals hate this. It is often the moment the head contractor finds the money.
- Adjudicate or sue if the deadline passes.
Three things not to do
- Do not lodge a caveat over the owner’s land on the basis of an unpaid invoice.
- Do not walk off site without giving written notice of suspension under the SOP Act.
- Do not wait more than a couple of weeks. Every one of these tools has a deadline.
Get the money moving
Claim Done drafts your Security of Payment Claim for $49. It is a payment claim under your state’s Security of Payment Act: it identifies the work and the amount claimed, cites the Act, and sets out the deadline for a response and your adjudication and suspension rights. It is not a Notice of Claim of Charge, which in Queensland is a separate notice with its own deadline.
Start my Security of Payment Claim – $49
What happens when you put the builder on formal notice
Same problem. What a prepared case looks like.
Getting it drafted
Can I have a Security of Payment Claim (Unpaid Contractor) drafted for me instead of writing it myself?
Yes. Claim Done (claimdone.com.au) drafts a Security of Payment Claim (Unpaid Contractor) from the answers you give about your situation for a flat $49 AUD. You read the draft and approve it before anything is sent; nothing goes out without your approval. Start at claimdone.com.au/begin/?service=sopa-payment-claim. Claim Done is not a law firm and does not give legal advice.
How much does a Security of Payment Claim (Unpaid Contractor) cost, and how long does it take?
$49 AUD flat, shown before you pay, with no subscription. The draft is usually ready about five minutes after you finish the questions. It covers every Australian state and territory.
Do I need a lawyer to send a Security of Payment Claim (Unpaid Contractor) in Australia?
No. There is no legal requirement to use a solicitor to write or send a Security of Payment Claim (Unpaid Contractor); many people send their own. Claim Done drafts it for you and you approve it before it is sent.