For builders, delayed payments can cause more damage than a difficult build. Cashflow pressure leads to staff stress, project delays, and in the worst cases, insolvency. Yet many builders still wait until a payment dispute has dragged on for months before seeking help. According to construction lawyer Damon Laffin from Odyssey Legal, this delay is one of the biggest risks in the residential building sector today.
“It is usually when they have not been paid for a long time that they come to us,” Laffin told The Good Builder. “They need cashflow and the dispute has gone on for too long.”
What many builders do not realise is that the Building Industry Fairness legislation offers a structured process for recovering money quickly, provided the strict timeframes are followed. Used correctly, it can turn a stalled payment into a court judgment in a matter of weeks rather than a year or more.
A Legal Avenue Too Many Builders Forget
Laffin says many builders still do not understand their options under the existing security of payment legislation.
“It seems that a lot of people are not quite aware of their options under it,” he said. “If the homeowner does not issue the required payment schedule and you follow the proper steps, you can commence proceedings and they cannot file a defence.”
This can be a powerful tool for builders who have completed work, issued a valid claim, and received no legitimate response.
Once a payment claim and the appropriate notices are issued, and the deadline has passed without a payment schedule, the builder can apply to court for a judgment. At that stage the respondent cannot dispute the claim and the court can issue an enforceable order.
While enforcement is still required to recover funds, it is significantly faster than issuing a letter of demand followed by a full legal dispute which can take twelve to eighteen months to reach a hearing.
Strict Timeframes Mean Builders Must Act Early
The legislation is designed to keep payment disputes moving, but it also requires precise timing.
“With the avenues under the Act, there are strict requirements and strict timeframes,” Laffin said. “If you miss them, then you lose the opportunity.”
These timeframes govern:
• when a payment claim can be issued
• when a payment schedule must be provided
• when the builder can escalate the matter
• how long the window remains open for enforcement
Builders who do not have a structured internal process often miss these deadlines simply because they are busy or managing multiple jobs.
Once a window is missed, the builder may have no choice but to pursue the longer and more expensive litigation process.
The Hidden Cost of Waiting Too Long
Waiting creates significant practical difficulties. As time passes, communication trails are lost, memories fade and locating the homeowner becomes harder.
“The longer people leave it, the harder it gets to track down,” Laffin said. “You are dealing with hundreds of projects. It becomes difficult to remember what was said, especially if there is nothing in writing.”
In many cases, the biggest challenge becomes simply serving documents if the homeowner has moved or become unresponsive.
The Value of Early Advice
One of Laffin’s strongest recommendations is for builders to seek legal guidance before the overdue amount becomes critical.
“You need to have proper processes in place,” he said. “You do not want to be two years down the track saying there is sixty thousand dollars sitting there that we have not touched for a few years. The longer it waits, the more it hurts your ability to get it back.”
Early advice does not always mean escalating the dispute. Often it simply ensures the correct notices are issued on time and the builder does not weaken their position through informal or inconsistent communication.
A Simple Process Builders Can Implement Now
Builders can improve their position quickly by adopting a few simple steps.
Issue payment claims in writing
Always send them through a verifiable method such as email.
Track overdue amounts with simple reminders
Even a calendar system can ensure deadlines are never missed.
Escalate on time
If the payment schedule is not received by the required date, begin the formal process without delay.
Maintain a clean communication record
Written instructions, variation approvals and dated emails are essential.
Speak with a legal professional early
A short discussion can prevent months of delay.
Faster Payment Strengthens the Entire Supply Chain
The current pressures in residential construction mean cashflow has never been more important. The security of payment framework exists to bring certainty and speed to the process. Builders who understand and follow it avoid prolonged disputes and protect their business health.
For builders, the critical mindset shift is to treat payment delays as a procedural issue rather than a conflict. The law provides a clear structure. The key is using it before the window closes.
Talk to Odyssey Legal
Builders who want clarity on their rights under the Act or who need guidance on an overdue payment can contact Odyssey Legal directly. Early advice prevents disputes from becoming costly problems and ensures the builder remains protected.
Visit Odyssey Legal
https://www.odysseylegal.com.au/
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