Chasing a homeowner who will not pay is different from chasing a builder. Security of Payment often does not apply to owner-occupiers, and your customer is not a company you can issue a statutory demand to. Here is the toolkit that actually works for a residential debt — and the one move that can backfire badly.
Start with the paper trail
- Letter of demand: the amount, what it is for, the due date, a clear deadline, and notice that you will escalate. Keep it firm and factual. Use the Letter of Demand template.
- Put everything in writing — it is what a tribunal will want to see.
The tribunal — your main forum
For most residential disputes the state tribunal or domestic building list is the path: VCAT (VIC), NCAT (NSW), QCAT (QLD), SACAT (SA), SAT (WA). They are built for self-representation, charge low fees, and handle unpaid invoices, defects and breach together. This is where most owner-occupier payment fights are actually decided.
Does Security of Payment apply?
Often not — most SOP Acts carve out the owner-occupier (a homeowner living, or intending to live, in the home). NSW builders can use SOP against homeowners in specific conditions and with notice, but do not assume it. Where SOP does apply it is the fastest route (see Security of Payment Explained); where it does not, the tribunal is your forum.
Suspending work — carefully
There is no automatic common-law right to down tools for non-payment. Walking off without a basis can be a repudiatory breach — meaning the customer can then sue you. You can only safely suspend if either (a) your contract expressly gives the right and you follow its notice and timing, or (b) SOP applies and you follow the statutory notice (often a ~2-business-day notice of intention). Get one of those right before you stop work.
A charge over the property — where available
There is no single national "builder's lien", but some states allow a statutory charge, a contractor's charge, or a caveat protecting a contractual charge — which can hold up a sale or refinance until you are paid. It is powerful leverage, but strict and property-law-technical: get advice before lodging a caveat, because a wrongful one can backfire and expose you to a claim.
If the "customer" is actually a company
If you contracted with a company (not an individual owner) and the debt is over the Corporations Act threshold — $4,000 — you can serve a statutory demand: the company has 21 days to pay, settle, or apply to set it aside; ignore it and the company is presumed insolvent for 3 months, opening a winding-up. Reserve this for clear, undisputed debts — there is an abuse-of-process risk if the debt is genuinely disputed. See Late Payment & Debt Recovery.
What the Australian Consumer Law does (and does not)
The ACL regulates conduct — misleading or unconscionable conduct and unfair contract terms — it is not a debt-collection tool. It mainly helps you resist an owner's unfair-terms or misleading-conduct allegations; for the money itself, use the tribunal, court or SOP.
Common mistakes
- Downing tools with no contractual or statutory basis (repudiation risk).
- Assuming SOP covers an owner-occupier — it usually does not.
- Serving a statutory demand on an individual — it only works against a company.
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