Who this is for
Head contractors, subcontractors, trades, and suppliers to the construction industry who are owed progress payments, final payments or retentions. Also the commercial clients of builders, where the dispute runs the other way.
Payment claims: the starting point
Under the Construction Contracts Act 2002, a payee can serve a payment claim on the payer. To count, a payment claim must, among other things, be in writing, identify the contract, the construction work and the period it relates to, state the amount claimed and the due date, show how the amount was calculated, and state that it is made under the Construction Contracts Act 2002. Every payment claim must also be accompanied by an outline of the payment claim process in the prescribed form.
Many invoices in the industry are not payment claims, because they leave out one of those elements. That matters, because the consequences below only follow a valid claim.
Payment schedules and what happens without one
A payer who disputes a payment claim must respond with a payment schedule stating the amount they will pay and, if it is less than claimed, why. The schedule must be given within the time the contract allows or, if the contract says nothing, within 20 working days after the claim was served.
If the payer gives no payment schedule in time and does not pay, they become liable for the full claimed amount. If they give a schedule and then do not pay the scheduled amount, they are liable for that. In either case the unpaid amount can be recovered as a debt due in court, and the Act limits the payer's ability to raise counterclaims or set-offs in those proceedings. The payee may also be able to suspend work after giving notice.
The Act protects a payee who has served a valid payment claim and kept to its deadlines. The paperwork at the start decides how strong the position is later.
Adjudication
Disputes about payment claims, and about the contract more generally, can be referred to adjudication under the Act. It is faster than court. Where adjudication is the right tool, we arrange it and enforce the result.
Retention money
Retention money withheld under a commercial construction contract is held on trust for the party it was withheld from. Amendments in force from October 2023 strengthened that regime: retentions must be kept separate and accounted for, there are offences for failing to do so, and directors can face personal consequences.
Pay when paid
A clause making your payment conditional on the head contractor being paid by the principal has no effect under the Act. If you are told you will be paid "when the client pays us", that is not, by itself, a reason to wait.
How we recover construction debt
We review the contract, the payment claim and the timeline, tell you where you stand, and take the account from demand through to court and enforcement where it needs it.
Our practical guide, what to do when a builder or client will not pay, sets out the steps in order.
General information, not legal advice. This page describes New Zealand law and practice as at October 2026; the right step for a particular debt depends on its facts. Where a matter needs legal advice, we will say so.