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New Zealand guide
New Zealand / Construction Contracts Act

What does New Zealand's Construction Contracts Act require of a contractor?

The Construction Contracts Act 2002 is New Zealand's payment law. A payment claim carries the prescribed Form 1 notice, and the payer has 20 working days to give a payment schedule or is liable for the full claimed amount. An unpaid party can suspend work or go to adjudication, and retention money is held on trust.

The payment cycle, in order

  1. End of the period the contract sets; if the contract is silent, the first part-month then monthly.
  2. Substantive compliance suffices (George Developments Ltd v Canam Construction Ltd [2006] 1 NZLR 177). The prescribed Form 1 notice goes with every claim.
  3. The payer gives a payment schedule within 20 working days. Contract time, else 20 Working Days after the claim is served; payer liable for the full claimed amount on the due date if no schedule is given.
  4. On or after the due date, recoverable as a debt plus actual and reasonable costs; also triggers a notice of intention to suspend work.
  5. Suspension permitted, without breach, once the amount is still unpaid 5 WD after the notice; an EOT follows. The notice period is 5 working days.

An unpaid party can also go to adjudication. No time limit found in ss 25-28 for starting adjudication (the Limitation Act was not checked); content requirements at s28(2); respondent's rights are in Form 2.

Retention money since 5 October 2023

Retention becomes trust property when the contract allows it to be withheld, whether or not actually withheld; if the contract has no term, when it is actually withheld. As soon as practicable, held at a registered NZ bank, retention money only, with the bank told it is trust money (or a complying instrument). Offence up to $200,000 (party A) / $50,000 per director, with a reasonable-steps defence. The rules are on retention money.

Every duty the library holds from the Act

In the order the library holds them. Each is on the Construction Contracts Act 2002 (NZ) page too, with how it was read.

DutyWindow and sectionIf missed
Hold retention money in a complying trust accountnone sets 18D, 18E, 18FB, 18DAan offenceLapsed compliance
Notify use of retention for a defect within 10 working days10 working dayss 18C(3)(c), 18DA(3)the claim is barredDisputes
Maintain a ledger of the retention trust accountnone sets 18E(4)-(6), 18EAno penalty statedDisputes
Give the retention trust account records to whoever the Act namesnone sets 18FCan offenceLapsed compliance
Determine which retention regime applies to the contractnone setSch 1 cl 1no penalty statedDisputes
Release retention on the terms the Act setsnone sets 18I, 18Gno penalty statedDisputes
Report the retention money held every 3 months3 monthss 18FDan offenceLapsed compliance
Keep the retention trust account in the status the Act requiresnone sets 18B(2)-(6), 18Cno penalty statedDisputes
Respond to an adjudication claim within 5 working days5 working dayss 36(1), 37(1), 37A, 46(1)(b)the claim is barredDisputes
Give the adjudication notice the Act requiresnone sets 28; Regs r 5no penalty statedDisputes
Agree on an adjudicator within 5 working days of the adjudication notice5 working dayss 33(2), 35(1)no penalty statedDisputes
Make a progress claim on the cadence the contract allows1 months 20(1), 17(2)no penalty statedDisputes
Make every claim a valid payment claim: identify the work and state the amountnone sets 20(2)no penalty statedDisputes
Attach the prescribed Form 1 notice to every payment claimnone sets 20(3)-(4); Regs r 4, Sch 1 Form 1a breach of contractDisputes
Issue the adjudicator's determination within 20 working days20 working dayss 46(2)a breach of contractDisputes
Be paid within 20 working days where the contract is silent20 working dayss 18you are liable for the full amountDisputes
Recover the amount owed if payment is not made by the due datenone sets 23, 24you are liable for the full amountDisputes
Make a payment schedule that identifies the claim and the scheduled amountnone sets 21the claim is barredDisputes
Receive a payment schedule within 20 working days of each claim, or the full amount becomes payable20 working dayss 22you are liable for the full amountDisputes
Give 5 working days notice before suspending work for non-payment5 working dayss 24Ano penalty statedDisputes

In this guide

What this page is, and is not

It is the section text this library holds for New Zealand's Construction Contracts Act 2002 (NZ), NZS 3910:2013 and Health and Safety at Work Act 2015, with the window and the consequence. The NZS 3910:2023 rows are read from secondary summaries of the draft, not the published text. It is not legal advice, and it is not a substitute for reading the Acts, the contract you signed and any special conditions.

These pages set out the duties the library holds for a New Zealand job.

No library of law is complete, and Demiton never says this one is. An obligation the library does not hold, and you did not add, is not protected. You can add your own to any job.

Common questions

What is New Zealand's Construction Contracts Act?

The Construction Contracts Act 2002 is New Zealand's payment law. A payment claim carries the prescribed Form 1 notice, and the payer has 20 working days to give a payment schedule or is liable for the full claimed amount. An unpaid party can suspend work or go to adjudication, and retention money is held on trust.

When must a payment schedule be given?

Contract time, else 20 Working Days after the claim is served; payer liable for the full claimed amount on the due date if no schedule is given. Not a valid schedule if this content is missing (Willis Trust Co Ltd v Green, HC Auckland CIV-2006-404-809).

When is a construction payment due in New Zealand?

Applies where the contract is silent on the due date; the payer becomes liable on that date.

Can work be suspended for non-payment?

Suspension permitted, without breach, once the amount is still unpaid 5 WD after the notice; an EOT follows.

How is retention money protected?

Retention becomes trust property when the contract allows it to be withheld, whether or not actually withheld; if the contract has no term, when it is actually withheld.

What does s 18D, 18E, 18FB, 18DA require?

Hold retention money in a complying trust account (s 18D, 18E, 18FB, 18DA). Consequence: an offence.

What does s 18C(3)(c), 18DA(3) require?

Notify use of retention for a defect within 10 working days (s 18C(3)(c), 18DA(3)). Window: 10 working days. Consequence: the claim is barred.