Progress Payment Rules for ACT Residential Building Work

What it is

A progress payment is money paid to a builder as the job advances rather than at the end. In most Australian jurisdictions the residential building statute has something to say about how those payments are structured. In the ACT it says almost nothing.

The word count tells the story. Across the whole of the Building Act 2004 (ACT), the phrase progress payment appears exactly once, at section 89B (2) (c), and it is not a rule. It sits inside the definition of when a contract for the sale of a residential building counts as involving residential building work. There is no stage table, no percentage cap, no claim procedure and no restriction on what a builder may ask for before starting.

The Building Act 2004 does not regulate progress payments

Part 6 regulates the warranty and the insurance. It does not regulate the payment schedule. There is no equivalent of the staged tables some states legislate, and no provision requiring a claim to relate to work actually performed.

Division 6.2A is the closest thing to a hook. Section 89C (1) lets a regulation prescribe a standard condition for a residential building work contract, and section 89C (2) makes entering a contract that omits one a strict liability offence carrying up to 10 penalty units. A staged payment schedule is exactly the sort of thing that power was built for. The Building (General) Regulation 2008 (ACT) has not prescribed one. The machinery is installed and switched off.

The consequence of a non-compliant schedule follows from that: there is no such thing. A schedule cannot fail to comply with a rule that does not exist. If an ACT payment schedule is unfair, the argument is a contract argument or an Australian Consumer Law unfair terms argument, not a Building Act argument.

Security of Payment does not reach a resident owner

The obvious question is whether the Building and Construction Industry (Security of Payment) Act 2009 (ACT) fills the gap. For the homeowner, it does not.

Section 9 (1) applies the Act to construction contracts whether written or oral. Section 9 (2) (b) then carves out a construction contract for carrying out insurable residential building work where a resident owner is a party, to the extent the contract relates to a building or part of a building where the resident owner lives or intends to live.

That is the whole owner-occupier market. A Canberra family building or renovating the home they will live in gets no payment claim, no payment schedule, no adjudication. The rapid statutory remedy that dominates commercial construction is closed to them.

It stays open elsewhere. Subcontractors chasing a head contractor, and contracts where no resident owner is a party, keep the full adjudication regime. So on one ACT site the builder can adjudicate against a developer while the owner next door has nothing but a contract and a court.

What actually shapes an ACT payment schedule

With no statute in play, four practical forces do the work.

• The insurance ceilings. ACT Government guidance advises keeping stage payments at or close to the maximum you can claim. Take the figures from the regulation rather than the guidance. Section 39 of the Building (General) Regulation 2008 sets insurance cover at $200,000, and section 43 caps what an owner recovers on a lost deposit at $10,000. The guidance page is stale on the point: it still says $85,000 for completed work, a figure superseded on 1 January 2025. A stage larger than $200,000 is a stage the insurance cannot make good.
• Pay in arrears. Guidance advises paying for a stage only after it is finished, precisely because there is no statutory protection if the builder stops.
• Certifier inspection. Where the certifier inspects a stage, guidance is to confirm the work complies with the approved plans and the building code before paying for it.
• More stages, not bigger ones. Because the ceiling is fixed and the schedule is not, the negotiable variable is how finely the job is cut up.

How the ACT compares

The comparison that matters is not with another state's stage table. It is with the ACT's own two gaps sitting on top of each other.

An ACT owner-occupier has no statutory deposit cap, unlike NSW at a flat 10 per cent, WA at 6.5 per cent, Victoria at 5 per cent for contracts of $20,000 or more, Queensland at 10 per cent for level 1 work and South Australia at 5 per cent above $20,000. They then have no statutory stage schedule, and no Security of Payment adjudication either.

Three protections other Australians take for granted, absent at once. The contract is not one input into an ACT payment schedule. It is the only one, which makes the drafting of it the whole game.