Residential exclusion (Security of Payment)
The residential exclusion bars a head contractor from using a Security of Payment Act against an owner-occupier. It does not flow down, so subbies stay covered.
Ask Chalkline about this →The residential exclusion in the Security of Payment (SoP) Acts is a carve-out that bars a head contractor from using the Act to claim against an owner-occupier on a home build. The SoP Acts give the construction industry a fast adjudication path to recover progress payments; the residential exclusion keeps the head-contractor-to-homeowner contract out of that fast track for owner-occupier home building, on the basis that a resident homeowner is not a commercial party. The exact threshold and conditions vary by state.
The critical point is that the exclusion does not flow down the contract chain. It only removes the head contractor’s ability to use the Act against the homeowner. The subcontractors engaged by that head contractor are still fully covered by the Act and can serve payment claims and go to adjudication against the head contractor in the normal way. So on an excluded home build, the builder cannot use the SoP fast track against the owner, but the builder’s subbies can still use it against the builder.
WA is the clearest example: under section 10 of its SoP Act, residential owner-occupier contracts under $500,000 are excluded at the head-contractor tier, while subcontracts on those same jobs remain covered. Other states draw the line differently, so check the specific Act for the job, in VIC or QLD. The exclusion is also why the pay-when-paid prohibition and the rest of the Act still matter to a residential builder: the parts that protect your subbies against you apply regardless.
Also known as: Residential occupier exclusion, owner-occupier carve-out, home owner exception.
Category: Contracts / Security of Payment.
Related
See also
References
- Building and Construction Industry (Security of Payment) Act 2021 (WA) s 10 (verified 2026-05-09)
- Crisp Law: Key obligations under WA’s Security of Payment regime (verified 2026-05-09)
Last updated: 2026-05-30. Verified: 2026-05-09. Quarterly review for currency.