The worst kept secret to quickly recovering debts for builders

Articles, Construction + Projects, ERA Legal News

What is the Security of Payment Act?

How to recover debt for builders?  In 1999, the NSW Government answered that question.

The Security of Payment Act is a legislative scheme which allows an alternative to Court for the NSW construction industry.  The scheme is designed to allow quick recovery of payments on a progressive basis.  Since its introduction in 1999, the scheme has been replicated (with some differences) throughout most of Australia.

Basically, a way for builders and trades to … “SHOW ME THE MONEY”

Why use the Security of Payment Act?

According to ASIC statistics, in the financial year of 2020 up to November 2020, 1,447 companies in the construction industry had external administrators (i.e. liquidators, receivers and administrators) appointed.  This represents 20% of all companies in Australia that had external administrators appointed.

The lack of cash flow for businesses in the construction industry is often the reason for a company failing.

The Security of Payment Act can be deployed to recover your debts as quickly as 35 business days after you submit an invoice (or a claim).  This is impressively fast.  The usual time standards of most Courts and Tribunals in New South Wales is to determine disputes between 6 to 12 months after filing a claim (and frequently longer).

According to NSW Fair Trading statistics, between January and March 2020, 47% of claimants using the Security of Payment Act received 100% of the amount that was claimed.  Additionally, around 10% of all claims made were settled quickly and privately.  Collectively, this represents a relatively good success rate for claims.

Between 1 July 2019 and 31 March 2020, claimants had received determinations under the Security of Payment Act  to the total of $79 million.  The Security of Payment Act is under utilised by the construction industry in NSW.

When to use the Security of Payment Act?

If you are a builder or a subcontractor, the odds are good that the Security of Payment will apply to you.  Knowing when and how to use the Security of Payment Act can be tricky.  That is why we have prepared a list of the 18 most important questions for claimants.

If you would like to improve the chances of recovering payment under the Security of Payment Act claim, please complete the questionnaire below.  Your answers will be sent to our Construction + Projects team who will call you (at no charge) to have a confidential discussion.

The Construction + Projects team led by Mark Yum, assist builders, subcontractors and others to successfully claim and recover payments under the Security of Payment Act.  We are confident you will gain value from this process.

The Questionnaire

We encourage you to complete the questionnaire as accurately as possible.

Get in touch

If you are interested to hear more, please get in touch with Mark Yum or send us an enquiry below.



With the technical skills, diverse backgrounds and practical experience to match, our teams care about their clients.

Our Expertise

We have a strong reputation for providing specialist, market-leading advice in the practices we offer. Our teams are experts in their field and provide an unrivalled service to clients.


We want to share our knowledge with you. A collection of news and insights into those areas in which we specialise.


We offer a relevant, easy access platform that allows clients and colleagues to gain access to relevant resources.

Contact Us

With offices in Sydney and Melbourne, our team pride themselves on always being available for their clients.


We are collaborative, respectful and inclusive. Recruiting the best talent is only half of the equation; providing a culture that enables development is the other.

See our exciting opportunities available for graduates, lawyers, legal support staff and business services professionals.