Security of payment - residential home owners

Does the Security of Payment Act apply to residential home owners?

Yes. The Building and Construction Industry Security of Payment Act 2009 applies to residential home owners who live in, or intend to live in, the dwelling where building or construction work (or the supply of related services) is being carried out.

For example, a residential home owner includes a person who owns a house or land, who has contracted with a builder or other contractor to be responsible for performing building work on that house or land. If they receive a claim for payment under this Act, they must either pay or lodge a a payment schedule giving reasons for not paying the full amount.

Doing nothing is not an option, otherwise the claimant can take the matter to adjudication and obtain a judgment against the home owner for the full amount claimed.

Is there a difference between a residential home owner contracting for work, and an owner builder?

Yes:

  • An owner builder has 10 business days to respond to a payment schedule, the same as an accredited builder.
    This is because an owner builder has taken on the role of being the responsible  builder for a project. For example, they include someone who has been registered as an owner builder by the Director of Building Control to carry out or manage building work. Under the Act they are treated the same as an accredited builder who is in the business of building.
  • residential home owner has 20 business days to respond to a payment schedule.
    This is because they are not in the business of building and may have little experience of contract administration.

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