Security of Payment Act NSW

The Building and Construction Industry Security of Payment Act 1999 or the Security of Payment Act NSW is enforced to curtail the instances of insolvency in the building and construction industry in NSW. It allows for the provision of certain rights and protections for the contractors or subcontractors and issuing a statutory mechanism to recover progress payments. The Security of Payments Act NSW is more valuable than ever as an increasing number of contractors/subcontractors are facing challenges to get paid for any of their work on time. Moreover, there is an increasing number of disputes in the building and construction industry in NSW because of the avoidance of payment for work.

Claimants get significant benefits with the Security Of Payments Act NSW, and they should not ignore such robust legislation. The implementation of this Act was intended to ensure continuity of payment to contractors/subcontractors. They otherwise, couldn’t resolve disputes arisen due to and slow or no payment. With the set forth of the Act, contractors/subcontractors can claim for the work they carry out and get paid without the requirement to spend huge amounts of money on lengthy court procedures.

For both commercial and residential settings, we at Adjudicate For You help you in payment disputes and debt recovery issues. Our skilled professionals help you make informed decisions by drafting and reviewing building and construction contracts, like residential contracts, commercial contracts, and subcontractor agreements.

Please feel free to contact us!

What is the security of payment act?

The Building and Construction Industry Security of Payment Act (SOPA) helps in ensuring that any individual or an organization that executes a construction work or supplies goods for the purpose of construction, gets paid. It was intended to provide a quick and inexpensive method for recovering payments under a construction contract. Contracts between any subcontractor or supplier and a home owner’s building contractor are covered in this legislation. The Act applies to various types of works such as civil engineering, electrical, residential or commercial building, hire of plant and equipment, landscaping, mechanical air conditioning, the supply of building material, plumbing, and maintenance.

For both residential and commercial building work, Adjudicate For You is there to provide you with timely and effective advice for negotiating a building and construction contract.

How does the Security of Payment Act work?

  • Payment Claim: Any individual who has executed a construction project or has supplied construction material under a construction contract (the claimant) can claim progress payments by giving a payment claim to the relevant contractor (the respondent). A payment claim includes the work, goods or services provided, the claimed amount, and mentions that the payment claim is made under the Building and Construction Industry Security of Payment Act 2002.
  • Payment Schedule: After the payment claim, the respondent can make the complete payment. In the case of a dispute initiated by the respondent over the due amount, the respondent can give the claimant a payment schedule. It elaborates the amount the respondent is willing to pay and provides a valid reason why the amount differs from the claimed amount. Instances may arise when the respondent cannot provide a payment schedule within the number of business days as mentioned in the contract. In such cases, the respondent is liable to pay the full amount claimed.
  • Adjudication: If a dispute arises on payment, the claimant can apply for adjudication by contacting an Authorised Nominating Authority, who will further nominate an adjudicator to adjudicate the payment dispute. Once the adjudicator accepts the nomination by ANA, within 10 business days, he/she then needs to determine when and what amount the respondent should pay. Since an adjudicator’s decision is not the final one if you lose at adjudication and feel that the decision was unfair, you can still make a claim to recover your money. The sole purpose of the Act is to get you the money associated with building construction and avoid the costs associated with delays.
  • Assistance From Court: Rather than apply for adjudication, the claimant has the option to approach the court to resolve a payment dispute. The claimant can file a complaint with the Magistrates’ Court or go to the Supreme or Country Court, depending on the claim amount.