Variation Done, Builder Won't Pay: A NZ Subcontractor's Options Under the Construction Contracts Act

sp8002
May 31
6 min read

You did the extra work, the head contractor verbally approved it, and now the variation has vanished from your payment. The Construction Contracts Act 2002 gives you a faster route than most subbies realise — if you serve the paperwork correctly.

By Steve Parker · Trueworks · NZ construction contract review · 7 min

What you'll learn

How to evidence a verbally-approved variation
The payment-claim to payment-schedule clock that can hand you the amount
When you can suspend work, and how adjudication works

Quick answer: If you carried out a variation and the head contractor will not pay it, the Construction Contracts Act 2002 is your fastest lever — but only if your paperwork is right. Serve a compliant payment claim that includes the variation. If the payer does not respond with a valid payment schedule within the contract's timeframe (or 20 working days by default), the claimed amount becomes a debt due and recoverable, and you may have the right to suspend work on notice. Disputes over whether the variation was authorised go to adjudication, with a binding decision usually inside 20–40 working days. The two things that sink subbies are a defective payment claim and a verbal-only variation with no written trail.

The pattern is familiar on NZ sites. The head contractor asks you to do something that is not in your subcontract — extra blocks, a re-dig, a detail the drawings missed. You do it, often that day, on a verbal "yeah, we'll sort it." Then the variation is queried, trimmed, or simply not certified, and your payment is light. The good news: the Construction Contracts Act 2002 was written precisely to stop payment getting stuck up the chain. The catch: it rewards the party whose paperwork is correct, and that is not automatically you.

This is the trades companion to our homeowner pieces on building variations. The Act applies to your subcontract the same way it applies up the chain.

First: was the variation actually authorised?

Adjudicators and courts decide variation claims on evidence of authorisation, not on the fact that the work happened. Before anything else, establish your trail:

A written instruction — a variation order, an email, a text, a marked-up drawing, even a site-diary entry the foreman initialled.
A scope comparison — what your subcontract priced versus what you were asked to do. The gap is the variation.
Notice you gave — did you flag, in writing, that the request was extra and would be charged? A short "confirming this is a variation, will price and claim" message at the time is worth more than any argument later.

A verbal-only variation is not lost — but it is harder, and it is exactly where head contractors apply pressure. The fix going forward is cultural: confirm every variation in writing, at the time, before you lift a tool. The fix for the one in front of you is to assemble whatever contemporaneous record exists.

The payment claim is your lever — get it compliant

Under the Construction Contracts Act, a payment claim that meets the requirements triggers a clock the payer cannot ignore. A compliant payment claim must:

be in writing,
identify the construction work and the relevant period,
state the claimed amount and the due date for payment,
indicate the manner in which it was calculated, and

state that it is made under the Construction Contracts Act 2002.

Include the variation as a clearly itemised line, calculated and substantiated. A vague claim invites a vague — or fatal — response.

The payment-schedule clock — and what happens when it is missed

Once you serve a compliant payment claim, the payer must respond with a payment schedule if they intend to pay less than claimed. The schedule must state the scheduled amount and, where it is less than claimed, the reason and the basis for withholding.

If the payer does not serve a valid payment schedule within the time the contract allows — or within 20 working days

where the contract is silent — the consequences are significant:

the claimed amount becomes a debt due, recoverable in court as a debt, and
you may be entitled to suspend work on giving the required written notice.

This is the "pay now, argue later" engine of the Act. A head contractor who lets the schedule deadline pass has, in effect, conceded the claimed amount for the time being — including your variation.

| Step | What you do | What the payer must do | If they miss it | |---|---|---|---| | Payment claim | Serve compliant claim incl. variation | — | — | | Payment schedule | — | Respond within contract timeframe / 20 working days default | Claimed amount becomes a debt due | | Suspension | Serve notice, then may suspend | — | Work lawfully suspended until paid | | Adjudication | Refer dispute | Respond | Binding interim decision, usually 20–40 working days |

Send Trueworks your subcontract and the disputed variation. You receive a written, code-cited assessment of your entitlement under the Construction Contracts Act — including whether the payer's payment schedule, or its absence, has already settled the question. NDA available; files NZ-hosted. → Email steve@trueworks.co.nz
or start at trueworks.co.nz

Variation gone unpaid?

Pay-when-paid does not save them

If the head contractor's excuse is "the client hasn't paid us," note that conditional payment terms — "pay-when-paid" and "pay-if-paid" — are void under the Construction Contracts Act. Their cashflow problem up the chain is not a lawful reason to withhold your certified payment. That single point resolves a large share of subcontractor variation standoffs.

Adjudication: the fast route for a disputed variation

Where the dispute is genuinely about whether the variation was authorised or correctly valued, refer it to adjudication. It is built for exactly this:

an independent adjudicator decides the dispute,
the decision is usually made within 20 to 40 working days,
it is binding on an interim basis and enforceable, and
it keeps you out of slow, expensive court proceedings.

Adjudication rewards the party who arrives with the cleaner documents. A written, clause-referenced assessment of your variation entitlement — what your subcontract priced, what you were asked to do, and what the Act requires of the payer — is the document that wins it.

For how variations are formally valued and disputes run on the head-contract side, see NZS 3910 §14 variation procedure and progress payments and retentions

FAQ — Unpaid variations for NZ subcontractors

The head contractor approved the variation verbally. Can I still claim it? Yes, but you will need to evidence authorisation — any written trace, scope comparison, or contemporaneous note. Verbal-only variations are harder, which is why confirming each one in writing at the time is the single best habit to adopt.

What makes a payment claim compliant under the Construction Contracts Act? It must be in writing, identify the work and period, state the claimed amount and due date, show how it was calculated, and state that it is made under the Construction Contracts Act 2002. A defective claim does not trigger the payer's obligations.

What if the builder does not send a payment schedule? If no valid payment schedule arrives within the contract timeframe — or 20 working days by default — the claimed amount becomes a debt due and recoverable, and you may serve notice and suspend work. This is the strongest lever the Act gives you.

Can the head contractor refuse to pay because the client hasn't paid them? No. Pay-when-paid and pay-if-paid clauses are void under the Construction Contracts Act 2002. Upstream non-payment is not a lawful basis to withhold your certified amount.

How fast is adjudication? An adjudicator's decision is usually made within 20 to 40 working days — far faster than court — and is binding on an interim basis and enforceable.

How Trueworks helps

Trueworks turns a contested variation into a document an adjudicator can act on: a written, code-cited assessment of what your subcontract priced, what you were instructed to do, and what the Construction Contracts Act 2002 requires of the payer — including whether their payment schedule (or its absence) has already settled the question. It is the clean paperwork that adjudication rewards, prepared the same day.

If a variation has gone unpaid, Trueworks sets out your entitlement in writing, with the clauses cited.

About Trueworks

Trueworks is built by Steve Parker — 20 years on the analytical side of NZ construction: variation reviews, contract advisory, and AI-augmented document analysis. It is the same defensible, code-cited read a quantity surveyor would give a variation, made available to the homeowners and trades on the receiving end of one. I answer every email personally during pilot phase.

steve@trueworks.co.nz · trueworks.co.nz