A payment claim you weren't expecting, or a completion date that's come and gone with no end in sight. For homeowners partway through a renovation or a new build, these are two of the most common ways a building project turns into a dispute. Most of the legal attention on residential construction goes to defects. But a large share of the disagreements we see between homeowners and builders never involve a crack in a wall at all. They're about what's owed, when, and for what.
This article looks at that side of the relationship: the rules that govern deposits, progress payments and variations under NSW law, what your builder is required to do if a project runs late, and what options you have if a dispute over money or time can't be resolved directly. It's a different question to the security of payment regime that protects contractors and subcontractors further down the chain. This is about the protections that exist specifically for the homeowners and apartment owners who have engaged the builder.
If your project's contract price (or, where the price isn't fixed, the reasonable market cost of the labour and materials) exceeds the amount prescribed by regulation, the Home Building Act 1989 (NSW) requires the contract to be in writing, dated and signed by both parties. That threshold is set by the Home Building Regulation 2014 (NSW): a contract priced over $20,000 attracts the full written-contract requirements in section 7 of the Act, while a contract priced over $5,000 but not exceeding $20,000 only needs a simpler written contract under section 7AAA, which is worth knowing if you're taking on a smaller renovation. Among other things, the contract must state the contract price prominently on its first page if it's known, and if the price isn't known or may be varied, the contract must carry a clear warning to that effect, explaining how the variation provision works.
The Act also requires the contract to set out details of any progress payments payable under it. This isn't a formality. It's the document you should be checking every time your builder asks for money.
The maximum deposit a licensed contractor can ask for on residential building work is 10% of the contract price. A builder isn't entitled to demand more than that before work starts, and can't lawfully make a bigger upfront payment a condition of the contract.
Beyond the deposit, a progress payment is only valid if it's one of two kinds (or a combination the contract specifically provides for): a fixed amount or percentage of the contract price tied to a clearly described, completed stage of work, or a payment for labour and materials already supplied or costs already incurred, supported by invoices, receipts or similar documents. A request for money that doesn't fit either model (an ad hoc "top-up" with no reference to a stage reached or costs actually incurred) isn't an authorised progress payment under the Act, whatever the reason given for it.
This matters practically as much as legally. When a payment claim doesn't map onto a stage in your contract or documented costs, that's usually the first sign a variation, a delay claim or a genuine dispute is being folded into a payment request without being dealt with properly in its own right.
Almost every renovation or build changes scope somewhere along the way: a fixture swapped, an unexpected site condition, a homeowner's own change of mind. The Home Building Act deals with this directly: any agreement to vary the contract, or to vary the plans and specifications for the work, must be in writing and signed by both you and your builder.
In practice, this protection gets bypassed constantly. A builder raises an issue on site, a homeowner says "yes, go ahead", and the cost only shows up (sometimes significantly higher than expected) on the next progress claim or the final invoice. If that variation was never put in writing and signed by both of you, you're on firmer ground querying it than the builder is asserting it, though the practical reality of a half-finished job on your property often makes homeowners reluctant to hold the line.
The better approach, and the one worth insisting on from the outset, is simple: before work on a variation proceeds, ask for it in writing (what's changing, what it costs, and what it means for the completion date) and sign off before the builder starts. If a variation has already happened without that paperwork, don't assume you have to pay whatever figure turns up later; the absence of a signed written variation is itself relevant to whether that amount is properly owed.
Being asked to pay for work you never agreed to in writing?
Undocumented variations and disputed progress claims are some of the most common, and most avoidable, disputes we see. Talk to our Building and Construction team before you pay an amount you're not sure is owed.
Free consultationEvery contract to do residential building work carries a statutory warranty that the work will be done with due diligence and within the time stated in the contract, or if no time is stated, within a reasonable time. A builder who has fallen well behind schedule without a good reason, and without agreeing an extension of time with you, may be in breach of that warranty.
What counts as "reasonable" depends on the job: weather, approvals, supply delays and genuine site issues are the ordinary friction of construction, and a few weeks' slippage on a long project rarely amounts to a breach on its own. What you're entitled to expect is candour: a builder who is running late should be telling you why, and what the revised timeframe looks like, rather than leaving you to chase updates. If your contract includes its own extension-of-time provisions, check what notice the builder is required to give and whether they've actually given it.
Where a delay has caused you real loss (additional rent, storage costs, or other costs directly caused by the builder's default), that loss may be recoverable, but it needs to be assessed against your specific contract terms and the reason for the delay. This is one of the areas where early advice tends to save homeowners money, because the strength of a delay claim usually turns on documentation you should be keeping as you go, not evidence you can reconstruct after the fact.
Many home building disputes are required to go through the regulator's building dispute resolution process before a matter can be taken to the NSW Civil and Administrative Tribunal (NCAT), although some categories of dispute are exempt from that requirement. Because the exemptions and the process both depend on what kind of claim you're making and its value, it's worth getting advice on your specific situation before you apply.
Where a matter does proceed to NCAT, the Consumer and Commercial Division hears most residential building claims arising under the Home Building Act, but only up to a $500,000 cap under section 48K of the Act. Claims above that figure fall to the District or Supreme Court instead. In disputes that involve an allegation of defective work, NCAT is directed to treat rectification of the work by the builder as the preferred outcome where that's a workable option, though that principle is squarely about defects, not about resolving a payment or delay dispute, which usually turns on the contract and the payment or progress records you can put in front of the Tribunal. Whether a matter is heading for negotiation, conciliation or a hearing, our Litigation and Dispute Resolution team can advise on the best forum for your claim and what evidence will carry the most weight.
Time limits differ depending on what you're claiming. For defective work, the statutory warranty periods under the Home Building Act are set out below.
That period is extended by a further six months if a defect only becomes apparent in the last six months of the window. Payment and delay disputes run on a different clock again: under section 48K of the Home Building Act, NCAT has no jurisdiction to hear a building claim lodged more than three years after the work was completed, or was required to be completed, separate from, and often shorter than, the warranty periods above. If you're weighing up a dispute of any kind, it's worth finding out where you stand on time before you decide how to proceed.
Payment, variation and delay disputes follow the volume and pace of residential construction, so where the building activity is concentrated, so is the pattern of these disputes. The detail below reflects where the Home Building Act protections above are most often tested in practice.
From Bondi and Coogee through to Double Bay and Vaucluse, the Eastern Suburbs' mix of heritage terraces and increasingly ambitious renovations and rebuilds on tightly held blocks produces construction disputes on high-value single-dwelling projects, where a variation dispute or a delayed completion carries more financial weight than the same disagreement would elsewhere in Sydney. Learn more about our work in the Eastern Suburbs.
Blacktown, Penrith, The Hills and Campbelltown are absorbing some of the largest new-dwelling approval volumes in the state, including the growth associated with the North West Growth Area and the Wilton Junction corridor. That pipeline of new contracts brings a corresponding volume of progress payment, variation and delay disputes as builders juggle multiple jobs across a fast-growing area. See our Blacktown, The Hills and Campbelltown location pages.
Liverpool sits at the core of the Western Sydney Aerotropolis catchment, with some of the highest development and construction approval volumes in Greater Sydney. That intensity of building activity means builders working to tight margins across multiple sites: a pattern that shows up in homeowner disputes over progress claims and completion timeframes as often as it does in planning matters. Learn more about our work in Liverpool.
Wollongong's sustained medium-density and infill construction is producing the payment and contract disputes that follow any building boom, with comparatively few specialist practices located in the region. Further south, Nowra and the Shoalhaven are still working through post-bushfire rebuilding years after the 2019–20 fires, and owners still resolving those rebuilding contracts should be aware that time limits on building and insurance claims can be shorter than they expect. See our Wollongong and Nowra location pages.
Sustained migration of Sydney buyers seeking a tree change has driven a significant wave of residential construction, renovation and subdivision activity across Bowral, Mittagong and the surrounding villages, and with it, a corresponding rise in building contract, defect and boundary disputes in a market that has grown faster than its access to specialist legal advice. Learn more about our work in Bowral and the Southern Highlands.
Homeowners contracting with a builder outside these areas have exactly the same rights under the Home Building Act. The pattern above simply reflects where these disputes arise most often, not where the law applies differently.
If a payment claim, an undocumented variation or a builder who has gone quiet on your completion date has you questioning where you stand, we're happy to talk it through. Speak to our Building and Construction team about your contract and what your options are, or get in touch for a free consultation.
This publication is intended as general information only and does not constitute legal advice. Please seek independent legal advice before acting on anything contained in it.
Liability limited by a scheme approved under Professional Standards Legislation.
No. Any agreement to vary your home building contract, or the plans and specifications, must be in writing and signed by both you and your builder. A verbal instruction to "just get it done and we'll sort the cost later" doesn't meet this requirement, which is exactly why undocumented variations become such a common source of dispute.
Under the Home Building Act 1989 (NSW), the maximum deposit a licensed contractor can ask for on residential building work is 10% of the contract price. A builder who demands more, or makes a bigger upfront payment a condition of starting work, isn't complying with the Act.
A progress payment is only authorised if it fits one of two models: a fixed amount or percentage tied to a clearly described, completed stage of work, or a claim for labour and materials already supplied, supported by invoices or receipts. A request that doesn't match either model isn't an authorised progress payment.
Every home building contract carries an implied warranty that the work will be done with due diligence and finished within the time stated in the contract, or a reasonable time if none is stated. A builder who is unreasonably delayed without good cause and without an agreed extension may be in breach of that warranty.
Most home building disputes need to go through the regulator's building dispute resolution process first, though some categories of claim are exempt. Because the exemptions and requirements depend on your specific claim, it's worth getting advice before you apply to NCAT.
It depends what you're claiming. Statutory warranty claims for defective work generally must be brought within six years for a major defect or two years for anything else, from completion. Claims about delay or an unpaid or wrongly charged amount are assessed under different limitation rules, so get advice early.
You're entitled to query a payment claim that doesn't match your contract's payment schedule or an authorised model under the Act. Disputing an amount you genuinely don't accept is different from failing to pay what's properly owed, so put your reasons in writing and keep records as the dispute develops.
For disputes involving defective work, NCAT generally treats rectification by the builder as the preferred outcome where that's workable. For payment and delay disputes, NCAT can make a range of orders depending on your contract terms and the evidence of payments made, work completed and time actually taken.
