Mechanical and HVAC subcontracts in Victoria: what to check before you sign
In Victoria, a mechanical subcontract is read alongside the Building and Construction Industry Security of Payment Act 2002 (VIC), which caps subcontract payment terms at 20 business days. The contract itself still decides the risks that cost mechanical and air conditioning subcontractors most: design and fitness-for-purpose obligations; plant lead times; commissioning at the end of the programme.
AI risk report, not legal advice. The scanner gives general information about the risks in a document. It is not a lawyer, does not know your circumstances, and can be wrong. For decisions with legal consequences, get advice from a construction lawyer.
Victoria rules that override your contract
Statute: Building and Construction Industry Security of Payment Act 2002 (VIC)
- Payment terms for subcontractors are capped at 20 business days after the payment claim. A longer term in the contract doesn't change that.
- If the builder disputes a payment claim, it has to answer with a payment schedule within 10 business days (or any shorter period in the contract).
- The Act was substantially reformed with effect from 15 April 2026: the old excluded-amounts and claimable-variations regimes are abolished, so damages, time-related costs and disputed variations can now generally be included in a payment claim, and reference dates are abolished too.
- Adjudication: through a private authorised nominating authority; the reforms are recent and practice under them is still settling.
Where mechanical and air conditioning subcontractors lose money
Design and fitness-for-purpose obligations
Design and construct mechanical packages often carry a fitness-for-purpose warranty that goes beyond reasonable skill and care, and that kind of risk is usually difficult to insure. Read whether you are warranting performance outcomes or just your design.
Plant lead times
Chillers, air handling units and controls can have long lead times. Without an extension of time for supply delays outside your control, a factory delay becomes your liquidated damages.
Commissioning at the end of the programme
Commissioning needs power, finished ceilings and controls integration from others. If your completion depends on whole-building commissioning, you carry everyone else's delay.
Long defects and seasonal testing
Seasonal commissioning can push final testing out a year. Check how that interacts with your retention release and defects period so money isn't held twice.
Three things to push for in your departures schedule
- Design warranty limited to reasonable skill and care, not fitness for purpose
- Extension of time for plant supply delays outside your control
- Completion of your works defined by your own scope and tests
The free scanner finds these clauses in your actual contract in about two minutes and writes the departures schedule for you.
What the Index says
Live figures from the Australian Subcontract Index, 90 real subcontracts. The Index holds no mechanical and hvac contracts so far, under the 10-contract threshold, so these are national figures across all trades. Nothing under 10 contracts is ever shown.
Mechanical and HVAC subcontracts in other states
Mechanical and HVAC subcontracts in VIC: common questions
How long does a builder in VIC have to pay a mechanical and hvac subcontractor?
No more than 20 business days after your payment claim, whatever the contract says. If the builder disputes the claim, it has 10 business days to answer with a payment schedule giving its reasons.
What is the biggest risk in a design and construct mechanical subcontract?
Usually the design warranty. A fitness-for-purpose obligation makes you responsible for the system achieving an outcome even where you used proper skill and care, and that risk is usually difficult to insure. Push for a reasonable skill and care standard.
Where do VIC mechanical and hvac payment disputes go?
Authorised Nominating Authorities (list via the Building and Plumbing Commission, formerly the VBA). Timing: through a private authorised nominating authority; the reforms are recent and practice under them is still settling.
Is this legal advice?
No. It is general information about common subcontract risks and the state's payment law as recorded in our registry. Statutory details change; check the current Act, and take the scanner's report to a construction lawyer for decisions with legal consequences.
General information, not legal advice. Statutory details are taken from our state law registry and change over time; verify them against the current Building and Construction Industry Security of Payment Act 2002 (VIC) before relying on them. Built by Mat Kennedy, Founder, The Construction Contracts Co.