Final Payment Withheld — What Are Your Rights? | PayClaim

Final Payment Withheld — What Are Your Rights?

You’ve finished the job. You’ve submitted your final invoice. And now the head contractor is finding every reason possible to withhold your final payment — defects, incomplete punch lists, documentation requirements, and anything else they can think of. Final payment disputes are extremely common in construction, and they can be among the most damaging to subcontractors who have already spent all the money to complete the work.

Security of Payment laws give you specific rights around final payment disputes. Here’s what you need to know.

Common Reasons Given for Withholding Final Payment

• Outstanding defects: A punch list of items used to justify holding the entire final payment
• As-built documentation: Claims that you haven’t provided required paperwork, warranties, or manuals
• Practical completion dispute: The head contractor claims practical completion hasn’t been achieved
• Set-off for liquidated damages: Claims that the project was delayed and you’re liable for LDs
• Disputed final quantities: Arguments about the final measurement of work completed
• Alleged over-claim: The head contractor says you’ve invoiced for work not done

Using the SOP Act for Final Payment Disputes

The Security of Payment Act does not require you to wait for formal “practical completion” or final accounts to be agreed before making a payment claim. You can serve a payment claim for any progress payment entitlement — including your final invoice — at any time after the relevant reference date.

When you serve a payment claim for your final payment:

• The head contractor has 10–15 business days to issue a payment schedule
• The payment schedule must identify each item disputed and the reason for each dispute
• Vague or unsubstantiated reasons for withholding final payment will be scrutinised in adjudication
• If the head contractor doesn’t respond, the full amount is owed

What About Defects and Punch Lists?

Defects are a legitimate reason to withhold some payment — but only in proportion to the cost of rectifying those defects. A head contractor cannot withhold your entire final payment of $80,000 because of $2,000 worth of minor defects. In adjudication, the adjudicator will assess the actual value of any legitimate defect claims and determine what payment is due.

If your work was properly completed and the defect claims are exaggerated or fabricated, adjudication gives you the opportunity to demonstrate that.

How PayClaim Handles Final Payment Disputes

1. Start your claim: Tell us about the final invoice, the head contractor’s position, and any defect or other claims they’ve raised.
2. We assess your situation: Our team reviews the dispute and advises on the best approach to recovering your final payment.
3. Payment claim served: We prepare and serve a compliant payment claim for your final payment amount.
4. Adjudication management: We handle the full adjudication process if the final payment is disputed, including responding to any defect or set-off claims.

Flat fee. No lawyers. Most final payment disputes resolved in 10–20 business days.

You Finished the Job — Now Finish Getting Paid

Your final payment is owed to you. Don’t let the head contractor turn your last invoice into a never-ending negotiation. Start your free claim with PayClaim today.