Payment Withholding Requests (NSW)
If your builder isn’t paying you, a payment withholding request under the NSW Security of Payment Act 1999 (Division 2A) can make the principal, your builder’s client, hold back money it owes the builder until your claim is decided. It’s one of the most effective ways to secure your money before it’s paid away.
How it works
- Serve a valid payment claim on the builder (the respondent).
- Make an adjudication application after a disputed payment schedule, or after the notice step if no schedule was given.
- Serve the payment withholding request on the principal, in the approved form, with a statutory declaration that you genuinely believe the amount claimed is owed.
- The principal must hold back the amount of your claim, or what it owes the builder if that’s less, from money due to the builder for that work.
- Win at adjudication, then serve a notice of claim and debt certificate under the Contractors Debts Act 1997 so the principal pays you directly. See Claims on the principal.
How long the money is held
The principal’s obligation ends when the first of these happens:
- the builder pays you;
- you withdraw the adjudication application (and don’t make a new one);
- you serve a notice of claim under the Contractors Debts Act; or
- 20 business days pass after the principal is served with the adjudicator’s determination.
Act quickly after the determination: serve the determination on the principal, and move to the Contractors Debts Act within that 20-day window.
If the party served isn’t actually a principal contractor, it must tell you so within 10 business days.
Queensland’s BIF Act has a similar payment withholding request process. Ask us about it.
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This page is general information, not legal advice. Last reviewed October 2026.