Getting paid on time is one of the biggest challenges facing New Zealand tradies. Late payments, disputed invoices, and builders who go silent can leave you chasing money for months. What many tradies don't realise is that the Construction Contracts Act 2002 (CCA) gives you powerful legal tools to enforce payment — quickly and cheaply — without needing a lawyer or going to court.
This guide explains how the CCA works, how to issue a valid payment claim, and how to use adjudication if a client or head contractor refuses to pay.
What Is the Construction Contracts Act?
The Construction Contracts Act 2002 (amended in 2015) applies to almost all construction work in New Zealand — whether you're a sole trader doing a bathroom reno or a subcontractor on a large commercial build. It covers:
- Building, construction, alteration, repair, and maintenance work
- Plumbing, gasfitting, drainlaying, and electrical work
- Landscaping and earthworks connected to construction
- Professional services like design, quantity surveying, and engineering
The law was designed by MBIE to prevent the "pay when paid" culture that historically left subcontractors at the bottom of the payment chain. Under the CCA, your right to payment is protected even if the head contractor hasn't been paid by the client.
Residential vs. Commercial: Know the Difference
The CCA applies differently depending on the project type:
Residential construction contracts (work on someone's home where they'll live there) give homeowners slightly more protections. For example, homeowners can suspend payment schedules in limited circumstances. However, your core rights as a tradie are still protected.
Commercial contracts have the full force of the CCA, including the right to suspend work if you're not paid.
If you're unsure which category applies, WorkSafe and MBIE both publish guidance, or you can consult a construction lawyer.
Your Most Important Tool: The Payment Claim
The payment claim is the formal mechanism that triggers your rights under the CCA. It's more than just an invoice — it's a legal document that starts a clock ticking for the other party.
What Must a Payment Claim Include?
Under section 20 of the CCA, a valid payment claim must:
- Be in writing
- Identify the construction work or goods/services it relates to
- State the claimed amount (including GST)
- State that it is made under the Construction Contracts Act 2002
That last point is critical. If you don't state it's a CCA payment claim, the other party doesn't have to respond as though it is one. A simple line at the bottom of your invoice — "This is a payment claim made under the Construction Contracts Act 2002" — is all it takes.
Use the /calculators/invoice-calculator.html on this site to calculate your totals including GST before issuing your claim.
When Should You Issue Payment Claims?
Your contract should specify payment dates. If it doesn't, the CCA provides default periods:
- For residential contracts: payment is due 20 working days after the claim is served
- For commercial contracts: payment is due 20 working days after the claim, unless the contract specifies a shorter period
You can issue payment claims at any time — weekly, fortnightly, monthly, or at milestones. The more regularly you claim, the less money you have at risk at any one time.
The Payment Schedule: The Payer's Obligation
Once you issue a valid payment claim, the other party must respond with a payment schedule within the timeframe set by the contract (or within 20 working days if the contract is silent).
The payment schedule must state:
- How much they intend to pay
- If it's less than the claimed amount, the reasons why (the "scheduled amount")
What Happens If They Don't Respond?
This is where the CCA gets powerful. If the other party:
- Doesn't provide a payment schedule at all: They owe you the full claimed amount on the due date, and you can apply directly to the District Court to recover it — no adjudication needed.
- Provides a schedule but doesn't pay the scheduled amount: You can apply for adjudication to recover the difference.
- Disputes part of the claim: Only the disputed portion goes to adjudication. The undisputed amount is still due.
Adjudication: Fast, Cheap Dispute Resolution
If there's a genuine payment dispute, adjudication is the CCA's answer. It's designed to be faster and cheaper than going to court.
How Adjudication Works
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Apply to an authorised nominating authority (ANA) — these are organisations approved by the New Zealand Institute of Arbitrators & Mediators (AMINZ) to appoint adjudicators. Common ANAs include AMINZ itself and the Arbitrators' and Mediators' Institute of New Zealand.
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An adjudicator is appointed — usually within 5 working days.
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You file your adjudication claim — stating what you're owed and why, with supporting evidence (your contract, payment claim, correspondence, photos, etc.).
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The other party responds — within 5 working days.
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The adjudicator decides — within 20 working days of accepting the claim.
The whole process typically takes 30–40 working days from start to decision. Compare that to the District Court, which can take 12–18 months.
How Much Does It Cost?
Adjudicator fees vary but typically run $3,000–$8,000 for a straightforward dispute. If you win, you may be able to recover costs from the other party. For disputes over $15,000–$20,000 or more, adjudication is almost always worth it. For smaller disputes, weigh the cost carefully — though the threat of adjudication alone often prompts payment.
MBIE publishes a list of authorised nominating authorities at mbie.govt.nz.
Can You Keep Working During Adjudication?
Yes — you can also suspend work if you haven't been paid. Under section 23 of the CCA, if a payment is overdue by at least 10 working days, you can suspend work after giving 5 working days' written notice. This is a powerful tool, especially on ongoing projects.
See our guide to fixed-price vs cost-plus contracts for tips on structuring contracts to reduce payment risk from the start.
Practical Tips for NZ Tradies
1. Always have a written contract. Verbal agreements are enforceable under the CCA, but they're much harder to prove. Even a simple email confirming scope, price, and payment terms creates a paper trail.
2. Label every invoice as a payment claim. Add the CCA statement to every invoice template. It costs nothing and gives you legal protection.
3. Track the clock. When you serve a payment claim, note the date. If you haven't received a payment schedule by the deadline, you can act immediately.
4. Don't wait too long. There are limitation periods — generally 12 months from when you first could have applied for adjudication. Don't let disputes drag on.
5. Get your paperwork in order. Before claiming, make sure you have: signed contract or quote, records of work performed, any variation approvals in writing, and your previous invoices and any partial payments received.
Use Fastcrew to manage your jobs, track time on site, and keep your invoicing records organised — having a clean job history in one place makes building an adjudication claim much simpler.
What the CCA Doesn't Cover
The CCA doesn't cover:
- Supply-only contracts (materials with no installation)
- Contracts under $30,000 if the work is on a residential property where the homeowner lives (recent MBIE guidance — check building.govt.nz for current thresholds)
- Employment agreements (wages disputes go through Employment Relations Authority)
- Disputes about the quality of work rather than payment (those go to the Disputes Tribunal or courts)
Your Rights Are Real — Use Them
Too many NZ tradies write off unpaid invoices because they think legal action is too expensive or complicated. The Construction Contracts Act was specifically designed to change that. A valid payment claim and the threat of adjudication resolves most disputes before they go anywhere.
Download our free NZ tradie contract templates and invoice checklists at tradietools.nz/templates/ — including a payment claim template that meets CCA requirements.
For guidance on pricing jobs so you're not left out of pocket from the start, see our job costing guide for NZ tradies.
NZ Tradie Tools provides free calculators, templates and guides for New Zealand tradies. Visit tradietools.nz.