---
title: "Covering letter to a principal contractor serving a payment withholding request (NSW)"
url: "https://ailawframework.com/precedents/construction-and-infrastructure/payment-withholding-request-covering-letter-nsw"
type: "precedent"
site: "AI Law Framework"
id: "a11-payment-withholding-request-covering-letter-nsw"
area_id: "A11"
kind: "letter"
ai_level: "yellow"
version: 1
task_ids: ["A11-X20260927-2"]
law_stated_as_at: "2026-10-18"
---

# Covering letter to a principal contractor serving a payment withholding request (NSW)

> Letter from a subcontractor's lawyers enclosing a payment withholding request under s 26A of the NSW Security of Payment Act: explains the principal contractor's duty to retain money, the 10-business-day notice if it…

Canonical page: https://ailawframework.com/precedents/construction-and-infrastructure/payment-withholding-request-covering-letter-nsw  
Law stated as at: 2026-10-18

Site index for agents: https://ailawframework.com/llms.txt

Letter from a subcontractor's lawyers enclosing a payment withholding request under s 26A of the NSW Security of Payment Act: explains the principal contractor's duty to retain money, the 10-business-day notice if it owes nothing, joint liability for paying out, and when the duty ends.

## Key facts

- Kind: Letter. A letter or email you adapt and send.
- Practice area: [Construction & Infrastructure](https://ailawframework.com/precedents/construction-and-infrastructure.md)
- Jurisdictions: New South Wales
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-18
- Status: Maintained. Checked on 2026-10-18 against the 3 authorities it cites, for New South Wales.

## When to use it

Use when a claimant has made an adjudication application against a respondent who is owed money further up the contract chain, and serves the approved-form payment withholding request on the principal contractor. The request itself is the approved form with its statutory declaration; this letter accompanies it.

## Used for these tasks

- [Serve a payment withholding request or subcontractors' charge to reach money held upstream](https://ailawframework.com/practice/construction-and-infrastructure.md#A11-X20260927-2)

## How AI may be used

AI may fill the covering letter from the adjudication application and the contract chain and diarise the claimant's follow-up duties; the lawyer checks who the principal contractor is and the amounts, and the claimant makes its own statutory declaration.

**AI may:**

- Fill the parties, project, payment claim and adjudication application details from the file
- Diarise the claimant's duties: serve the determination within 5 business days of receiving it, and give notice of any withdrawal within 5 business days
- Build the contract chain table from the subcontract and head contract documents on file

**AI must not:**

- Must not draft, fill or outline the statutory declaration that the approved-form request must include
- Must not alter the approved form or state amounts different from the adjudication application
- Must not tell the principal contractor that it owes the respondent money unless the claimant has a basis for saying so

**The lawyer checks:**

- An adjudication application has been made for the payment claim before the request is served (s 26A(1))
- The person served is a principal contractor within s 26A(4): someone by whom money is or becomes payable to the respondent for the relevant work
- The request is on the form approved by the Secretary and includes the claimant's own statutory declaration (s 26A(2) and (3))
- Service method and proof of service are in place, and the follow-up duties in ss 26B(5) and 26D(3) are diarised

## Authorities

- [Building and Construction Industry Security of Payment Act 1999 (NSW) s 26A (payment withholding request in the approved form, with the claimant's statutory declaration; principal contractor; notice within 10 business days if not a principal contractor)](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1999-046)
- [Building and Construction Industry Security of Payment Act 1999 (NSW) s 26B (obligation to retain money; when it ends, including 20 business days after service of the determination; claimant to serve the determination within 5 business days)](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1999-046)
- [Building and Construction Industry Security of Payment Act 1999 (NSW) ss 26C and 26D (joint and several liability for paying the respondent in contravention; protections for the principal contractor; notice of withdrawal within 5 business days)](https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-1999-046)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/construction-and-infrastructure/payment-withholding-request-covering-letter-nsw and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*