When a Queensland builder fails, most unpaid subcontractors become unsecured creditors. Three tools can lift you out of that pool: trust money, a subcontractor’s charge and a payment withholding request. Each depends on acting within weeks.
Construction remains Queensland’s largest insolvency sector. It accounted for 569 of the 2,706 Queensland companies entering external administration in 2025–26 (see our insolvency statistics). The main protections sit in the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act). Our construction insolvency guide covers the law in depth. Our articles on the Bathla collapse and its aftermath cover New South Wales.
Is your money held on trust?
Start here, because trust money is not available to the builder’s general creditors. A project trust applies where more than half the contract price is for project trust work. The threshold is $1 million for contracts with the State or a hospital and health service, and $10 million otherwise (s 14). Cash retentions on those projects must sit in a retention trust.
Phases that would have lowered the private threshold in 2025 were paused, and remain paused. Most private projects under $10 million therefore have no trust.
Trust protection is strong. In Re PBS Building (Qld) Pty Ltd [2024] QSC 108, the builder had no right to its trust administration costs from trust funds. The liquidators’ application for directions to be paid from the accounts was refused.
Can you claim a charge over money the principal still owes?
Without a trust, a subcontractor’s charge under Chapter 4 of the BIF Act is often the strongest tool. It attaches to money the principal owes the builder, reaching past the builder to the party above. It does not apply to domestic building work or to money held in trust.
The deadlines are short. A certified notice of claim must be given within three months after the work is completed. For retention money, time runs from the end of the defects liability period. Proceedings to enforce the charge must start within one month after the notice.
Suing a builder in administration needs the administrator’s consent or the court’s leave (Corporations Act 2001 (Cth) s 440D). In liquidation, the court’s leave is needed (ss 471B, 500(2)).
In Taringa Property Group Pty Ltd v Kenik Pty Ltd [2025] QSC 222, three subcontractors had started charge claims. Another creditor had made a payment withholding request. The court had declared $803,267.16 paid into court by the principal to be retained for those claims (BIF Act ss 97B, 126). The builder was later wound up in insolvency.
Is adjudication still worth pursuing?
Usually, while the builder is still trading. Once it is in liquidation, a claim against it generally gives way to the proof of debt process.
Adjudication’s hidden value is the payment withholding request. If an adjudicated amount goes unpaid, the claimant can require a higher party to withhold money owed to the builder (s 97B). A higher party that fails to comply becomes jointly liable. A decision obtained while the builder trades can therefore reach money further up the chain.
What can the QBCC do?
The QBCC’s builder insolvency guide tells creditors to contact the insolvency practitioner immediately, who may not know you are owed money. Lodge a proof of debt with contracts, invoices and photographs.
The QBCC cannot recover your money. A free monies owed complaint can, however, prompt licence action over an undisputed debt that is due. Directors and influential persons of a failed construction company, in the two years before, are generally excluded from licensing for three years.
Homeowners should look to the QBCC Home Warranty Scheme. Non-completion claims must be lodged within three months after the contract ends.
What about supplied goods and past payments?
Retention of title protects suppliers only if registered on the PPSR in time. Otherwise, the interest generally vests in the company on administration or liquidation (Personal Property Securities Act 2009 (Cth) s 267). Goods built into the structure usually become fixtures, outside that Act (s 8(1)(j)). See PPSR and retention of title.
If the builder is wound up, a liquidator may recover unfair preferences received in the six months before the relation-back day (ss 588FA, 588FE(2)). A running account or good faith defence may reduce the exposure (ss 588FA(3), 588FG(2)). Payments from a project trust were trust money, which may change the analysis.
What subcontractors should do now
- Confirm the appointment on ASIC’s register and write to the appointee.
- Ask whether a project or retention trust applies.
- Identify who owes the builder money, and diarise the charge deadlines.
- Finish any adjudication, and consider a payment withholding request.
- Lodge a proof of debt and, for an undisputed debt, a QBCC complaint.
- Take advice before repaying anything received in the last six months.
What directors of building companies should do now
- Never misuse trust money. Unlawful withdrawals carry up to two years’ imprisonment (BIF Act s 20A).
- Get advice early, while safe harbour and voluntary administration remain open.
What to watch
- Tranche 4 of the Building Reg Reno, which proposes “providing guidance for trusts following an insolvency”.
- Whether the paused trust rollout resumes or is wound back.
- A Court of Appeal ruling on BIF Act claims involving insolvent parties.
To discuss how these developments affect you, contact us on +61 7 3229 9800 or send us an enquiry online.
This article is general information only and is not legal advice.
Sources: Building Industry Fairness (Security of Payment) Act 2017 (Qld); QBCC, Pausing the further rollout of trust accounts (10 February 2025); QBCC, Deconstructing the Building Reg Reno; Department of Housing and Public Works, Building Reg Reno (updated 17 July 2026); Queensland Government response to the Queensland Productivity Commission construction inquiry (January 2026); QBCC, Subcontractors’ charges; QBCC, Payment withholding request; QBCC, Builder insolvency and financial difficulty: creditor and subcontractor support (June 2024); QBCC, Monies owed complaint; QBCC, Exclusion due to insolvency; QBCC, Queensland Home Warranty Scheme factsheet; Re PBS Building (Qld) Pty Ltd [2024] QSC 108; Taringa Property Group Pty Ltd v Kenik Pty Ltd [2025] QSC 222; Corporations Act 2001 (Cth); Personal Property Securities Act 2009 (Cth); ASIC, Insolvency statistics, Series 1 (released 28 September 2026).