Progress Payment Rules Under the QBCC Act in Queensland

What it is

Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) controls what a builder can invoice on a domestic job and when. Section 34 does not tell the builder how many claims to make or what to call them. It tells the builder that every claim after the deposit has to be earned by work already standing on the site.

This is the QBCC Act regime for regulated contracts with home owners. It is not the Building Industry Fairness (Security of Payment) Act 2017 (Qld), which runs a separate adjudication process covered in its own entry.

What a builder may claim

Section 34(1) says the builder under a regulated contract must not claim an amount, other than a deposit, unless the amount:

• is directly related to the progress of carrying out the subject work at the building site; and
• is proportionate to the value of the subject work that relates to the claim, or less than that value.

The Act supplies its own worked example: a claim for half the contract price less a 5 per cent deposit, demanded after half the subject work is finished, satisfies the test.

Section 34(3) matters more than it looks. A builder is taken to claim an amount if the builder demands or receives it, so issuing the invoice early is itself the offence.

Progress on site, not progress in the factory

Section 34(4) narrows the words building site for this section. It does not include a place where the subject work has been, is being or is to be carried out if the work is required to later be installed or constructed at another place under the contract.

Read that against section 33. A builder fabricating more than half the contract value off site can take a 20 per cent deposit, but once work starts the workshop stops counting. Cabinetry finished in a factory is not progress at the building site until it goes into the works.

Stages are recommended, not required

Section 33 splits deposits between level 1 and level 2 regulated contracts. Section 34 does not. The proportionality test is identical for a $5,000 bathroom and a $900,000 new home.

This is also where Queensland parts company with the states that legislate a stage table. Neither section 13 nor section 14 requires a stage-based payment schedule. Both require the contract price or the method for calculating it including the builder's reasonable estimate, plus the date for practical completion. Section 14 adds a start date and a statement of each statutory warranty. Section 34(2) gives power to prescribe by regulation when an amount is proportionate, and that power has not been used: Part 7 of the Queensland Building and Construction Commission Regulation 2018 prescribes only the level 2 amount, buildings that are not homes and publication of the consumer building guide.

So the schedule is negotiated. QBCC states that for all contracts valued at more than $3,300 the number and timing of progress payments is agreed between owner and contractor, but every progress payment must be relative to the amount of work completed. Its worked example: the contractor cannot claim more than 50 per cent of the contract price, including the deposit, until at least 50 per cent of the work on site is done. QBCC recommends linking payments to clearly defined stages, and where a contract pays at regular intervals instead it expects detailed evidence of the value of work performed in each period.

What a non-compliant claim costs

Section 34(1) carries a maximum penalty of 50 penalty units, half the 100 units attached to an excessive deposit. A conviction adds 2 demerit points under Schedule 5 of the Regulation, against a threshold of 30 points in 3 years for a 3 year licence exclusion.

A front-loaded schedule does not void the contract. It survives as a term and gets attacked claim by claim under section 34. The owner who pays it loses ground too, because QBCC warns that paying more than the contract amount, or paying early, reduces the protection available under the Queensland Home Warranty Scheme. Under the QBCC New Home Construction Contract the owner must pay an undisputed claim within 5 business days of receipt and must dispute it within that same window.

Where the BIF Act stops

Section 61 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) keeps chapter 3 away from a construction contract for domestic building work where a resident owner is a party, to the extent the contract relates to the building that owner lives in or intends to live in. A builder cannot serve a statutory payment claim on a home owner and run to adjudication. Subcontractors keep their full BIF rights against the builder.