When the Construction Contracts Act applies
The Construction Contracts Act 2002 (CCA) applies to construction contracts for work in New Zealand, subject to the Act's exclusions. Whether it applies depends on the work and contract, not simply on whether you are a tradie. Check the Act's definitions of construction work and a construction contract, and its application rules.
The CCA covers payment claims and disputes arising from qualifying construction work. It is not the general law for every unpaid invoice. If your invoice is for work outside the Act, see our guide to debt collection laws in NZ.
Make a compliant payment claim
A CCA payment claim is a formal demand for payment under a construction contract. Before relying on the Act, check the requirements in section 20. The claim needs enough detail to identify the contract and the payment period, explain how the amount was calculated, state the claimed amount and due date, say it is made under the Act, and explain the payer's right to provide a payment schedule. It must also include the prescribed information.
Keep the claim, supporting records, and proof of service. Follow the Act's service rules and the contract's notice details. A routine invoice may not meet every payment-claim requirement, so do not assume that adding a heading alone makes it compliant.
Read the payment schedule
A payer can respond with a payment schedule identifying the claim and scheduled amount. If it offers less than claimed, the schedule must explain how the amount was calculated and why payment is withheld or reduced. See section 21.
Check the contract for the response deadline. If it sets no period, the payer generally has 20 working days after service to provide a schedule under section 22. A missed schedule does not itself put cash in your account: the claim amount becomes payable under the Act, and you may still need to use its next steps to resolve non-payment.
If a schedule disputes part of the claim, compare its reasons with your contract, claim and evidence of completed work. Keep the amount genuinely in dispute separate from any amount the payer accepts.
When can you suspend construction work?
The CCA gives a right to suspend qualifying construction work in specified non-payment situations, including an unpaid claimed or scheduled amount, or an unpaid amount in an adjudicator's determination. It is conditional: you must first serve the required notice and meet the Act's conditions. If the amount remains unpaid after the notice period of 5 working days, section 24A allows suspension; read the current notice and suspension rules and get advice if the position is disputed.
Do not treat suspension as an informal walk-off. Confirm the trigger, amount, service method and notice wording before stopping work, and follow any contract or site-safety obligations that still apply.
Use adjudication to resolve a construction payment dispute
A party to a construction contract can refer a dispute about payment or other contract matters to adjudication under section 25. The Act sets out how to start a claim, provide the supporting material and respond. Keep the payment claim, schedule, contract, variations, delivery or completion records, and relevant communications together so the dispute can be explained clearly.
An adjudicator's determination ordering payment can be enforced through the CCA's court process. The Act treats determinations about payment differently from determinations that only address rights and obligations, so check sections 48 and 58 before assuming a result can be entered as a judgment. Adjudication is a statutory payment-dispute route; it does not guarantee recovery if the payer cannot pay.
Interest: ordinary invoices and retention money
The CCA's section 18G deals with interest on late retention money. It does not create a blanket interest rate for every overdue invoice. For an ordinary payment claim, check the construction contract for an agreed interest term and get advice if its application is contested.
Retention money is a separate amount withheld under a construction contract. Do not describe an ordinary unpaid progress payment as retention money just because it is overdue. The Act's retention provisions, including how money must be held and when it is payable, have their own rules.
A practical CCA checklist for tradies
- Confirm the contract and work fall within the CCA.
- Check the contract's payment, response, service and notice terms.
- Prepare a payment claim that meets section 20 and keep evidence that it was served.
- Record any schedule, the scheduled amount, and the payer's reasons for withholding money.
- Consider adjudication for a construction-contract dispute, and follow the formal process.
- Use the suspension right only after checking the statutory trigger and notice conditions.
- Check the contract for interest on ordinary payments; apply section 18G only to retention money.
This guide is general information, not legal advice. Payment-claim requirements and suspension can have serious consequences; get advice on your contract and facts before relying on them.
Common questions about CCA payment rights
Does the CCA apply to every tradie's invoice? No. It applies to qualifying construction contracts and construction work, subject to the Act's exclusions. An invoice for unrelated goods or services may need to be pursued under general contract and debt law instead.
Can I stop work as soon as an invoice is late? No. Section 24A sets conditions and requires notice. Check that the unpaid amount and circumstances qualify, serve notice correctly, and wait through the statutory period before suspending.
Does the Act's retention-money interest rule apply to every late invoice? No. Section 18G is specifically about retention money. For ordinary amounts, look at the payment terms in your contract.