Free letter of demand for construction & subcontractor debts

Why does construction have the highest insolvency rate of any industry?

Master Builders Australia recorded 3,217 construction firm collapses in FY24, up 26% year-on-year — roughly nine a day. 11.6% of construction invoices are more than 60 days overdue (Master Builders, FY24). The principal or head contractor who owes you a progress payment might not be trading in six months, which is why acting on a late payment early matters more here than in almost any other industry.

See the full breakdown, including how insolvency risk compounds with each missed payment, in the 2026 Debt Collection Report.

Should you use a SOPA payment claim or a letter of demand?

If you are still inside the security-of-payment timeframe for a registered payment claim, adjudication is faster and gives you a statutory right to payment — use the progress claim generator instead, not this tool.

A letter of demand is for everything SOPA does not reach: retention money once it falls due, a backcharge or defects dispute that has already been through adjudication, an invoice outside the claim window, or a debtor type the Act does not cover (a residential owner-occupier in some states is exempt). This tool is for that stage — not a replacement for a payment claim you can still make.

Do you need a lawyer to send one?

Anyone can write to someone who owes them money, anywhere in Australia. Chasing a debt owed to you is acting on your own behalf, and that needs no licence.

Who signs it still matters. A demand from the subbie who has already chased three times reads like the fourth chase. That is the reason a paid option exists, not a legal requirement.

When is a letter of demand the wrong move on a construction debt?

• You are still inside the SOPA claim window. Adjudication gets you a statutory right to payment faster than a letter. Use the progress claim generator instead.
• The amount is genuinely disputed as defective work. That goes to an assessor or adjudicator, not a demand letter.
• Retention is being held under a defects liability period that has not ended yet. Sending a demand before the release date is due achieves nothing.
• They are already in liquidation, administration or bankruptcy. A demand does nothing once an insolvency practitioner is appointed. Lodge a proof of debt instead.
• The debt is outside the limitation period. Most Australian contract debts stop being enforceable after six years. Check the limitation period first.

And one about us rather than you: we can only send letters on your behalf where the debtor is in NSW, Victoria, Queensland or the ACT. Doing it for someone else in WA, SA, Tasmania or the NT needs a licence we do not hold. The free letter above works in all eight.

Should you send it yourself, or have us send it?

A letter you send yourself works in a small number of cases — usually where the other side simply forgot and one firm reminder is enough.

For most debts it is not enough. If you have already asked and been ignored, another message from you changes nothing. What changes things is the debt leaving your hands: a demand on our letterhead, written and approved by a NSW solicitor, delivered and tracked, followed up on a schedule, and handed to a partner law firm on day 14 if it is still unpaid.

Use the free letter to put it in writing. If that does not work, you need more than a letter — see how the whole process works for construction debts on the construction industry page and the construction debt collection guide.

What other letters can you build here?

Every one of these is the same tool, set up for a different debt. All free, all downloadable as Word or PDF.

• Unpaid invoices — the general business version, and the place to start if none of the others fit
• Unpaid wages — what law is on your side when wages go unpaid
• Rent arrears — does a rent demand go to a court or a tribunal
• Strata levies — why does this letter give 30 days when the others give 7
• Unpaid fees — does your engagement letter change what you can demand
• Money you lent — can you recover a loan with nothing in writing

Still inside your claim window? Use the progress claim generator instead of this tool — or head back to all free tools.