Security Of Payment Act NSW
Protecting building & construction contractors in NSW
Key topics
Construction Contracts
The purpose of the Security Of Payment Act NSW is to enable a person who, under a construction contract, has undertaken to carry out construction work or to supply related goods and services for a construction project in the state of New South Wales is entitled to receive a progress payment.
Payment Claims
Preparation and service of a payment claim made under the Security Of Payment Act NSW is the first step in the process that leads to the adjudication of a payment dispute or non-payment of monies owed. A payment claim must meet all of the statutory requirements of the Act to be valid and must be duly served.
Payment Schedules
A person who has received a claim for payment endorsed as a payment claim made under the Security Of Payment Act NSW must respond with a valid “payment schedule” that meets all of the statutory requirements of the Act within 10 business days of receiving the payment claim. Failing to do so has serious consequences.
Adjudication
Adjudication is the final step in the Security Of Payment Act NSW process. The adjudication process requires each party to provide written submissions together with supporting evidence to an authorised nominating authority who in turn provides each party’s submissions to an adjudicator who makes a binding determination.
Quick Links
Start A Claim Now
Submit your claim details through our online portal to commence a claim for payment under the Security Of Payment Act NSW before the time allowed to do so runs out.
Get Help With A Payment Schedule
Submit the claim details through our online portal of the payment claim that you have received under the Security Of Payment Act NSW before the time allowed to do so runs out.
Payment Claim Being Ignored
If you have served a payment claim, and it has been ignored, before you can start the adjudication process under the Security Of Payment Act NSW you need to serve a 2nd Notice.
Apply For Adjudication
If you have served a payment claim, which was ignored, you have served a 2nd Notice, or you received a payment schedule in reply to a payment claim or 2nd Notice, start the adjudication process under the Security Of Payment Act NSW now.
Recovering An Adjudicated Amount
If an adjudicator has awarded you an amount of money in a determination made under the Security Of Payment Act NSW the respondent has 5 business days to pay. If the respondent fails to pay the adjudicated amount you are entitled to enforce the determination.
News
Security Of Payment Act NSW Claim Preparation
When you are seeking a determination at adjudication that you are entitled to be paid for the work that you have done it is of the utmost importance that the preparation of your payment claim has left no stone unturned.
Key Points of Security Of Payment Act NSW Claim Preparation
- Contract Review
- Clear & Comprehensive Understanding Of Work To Be Claimed
- Formatting Of Payment Claim
- Service Of Payment Claim
- Monitoring & Follow Up
Contract Review
Your right to entitlement to make a claim under the Security Of Payment Act NSW flows from a construction contract.
A construction contract can be a simple oral agreement, a deal scribbled on the back of a beer coaster in a pub, a quotation and a purchase order, or a formal instrument of agreement (a thick wad of paper with lots of legal jargon !!!).
What ever form the construction contract takes it will essentially consist of these 5 things:
- Offer (to carry out work or provide related goods or services)
- Acceptance (of the offer)
- Intention to be bound (by the arrangement, agreement, contract)
- Consideration (work done, money paid)
For the purposes of the Security Of Payment Act NSW the terms of the construction contract are not crucial because the security of payment act legislation makes provision for both agreed terms and terms that haven’t been agreed or even considered.
For example; when can you make a claim, when is payment due, what is the value of the work, how to deal with variations, how to deal with defective and or incomplete works, etc… etc…
Preparing a payment claim under the NSW Security of Payment Act regime must consider all of the above.
Clear & Comprehensive Understanding Of Work To Be Claimed
The NSW security of payment act legislation makes provision for one claim per month and unless the construction contract says otherwise a monthly progress claim can only be served on or after the last day of the month.
This means that all work completed during the month of June can be claimed on or after the 30th of June.
It is crucial that the claim is for work that has actually been carried out, completed, and is defect free.
You cannot over claim or claim in advance and it is not helpful to your cashflow to under claim.
Keeping a daily written and photographic record of work carried out is perfect for when you get to the end of the month and you are preparing your claim.
Formatting Of A Payment Claim
The NSW Security Of Payment Act legislation is very strict on how a payment claim is to be formatted, or in others what it must include.
A payment claim must be addressed to the correct entity, the actual entity that you have contracted with. The name must appear in full and be accompanied by the ACN or ABN number.
A parent claim must clearly itemise all of the works being claimed and show how the amount being claimed for each item has been calculated.
Service Of The Payment Claim
Service of the payment claim can make or break a successful outcome. If a construction contract specifies and address for service this must be followed. Or if the contract is silent on this section 31 of the Building And Construction Industry Security Of Payment Act 1999 sets out how a claim must be served.
Monitoring & Follow Up
Once you have effected proper service of a payment claim under the Security Of Payment Act NSW you must monitor physical addresses and email addresses etc for a response from the respondent.
The Respondent has 10 business days to pay a payment claim in full or provide a valid payment schedule setting out reasons for non payment if the full amount of the payment claim isn’t going to be paid.
Once you receive a payment schedule you have 10 business days to lodge an adjudication application.
If you do not receive a payment schedule in the 10 business days and you do not receive full payment by the due date for payment you need to serve a notice under section 17(2) of the Building And Construction Industry Security Of Payment Act 1999 within 20 business days of the due date for payment. This notice gives the respondent a further 5 business days to pay in full or provide a payment schedule. If you do not receive full payment within the five days then you have 10 business days to apply for adjudication after you receive a payment schedule or if no payment schedule is received after the end of the 5 business day period.
Recovering An Adjudicated Amount
If an adjudicator has awarded you an amount of money in a determination made under the Security Of Payment Act NSW, known a the “Adjudicated Amount”, the respondent has 5 business days to pay.
If the respondent fails to pay the adjudicated amount you are entitled to enforce the determination.
Read more...Changes To Security Of Payment Act NSW For Residential Owner Occupiers
As of 1 March 2021 building and construction contractors in New South Wales can make a claim for their work under the Building And Construction Industry Security Of Payment Act 1999 (NSW) against owner occupiers for work carried out at the residence where the home owner resides or intends to reside.
Read more...COVID19 Pandemic Does Not Limit The Powers of Security Of Payment Act NSW
The world is in the grip of the most deadly pandemic in over 100years.
Now more that ever in these uncertain times the Security Of Payment Act NSW ensures claimants have a pathway to recovering monies they are owed for building and construction work in NSW.
Read more...Amendments To SOPA NSW Commenced 21 October 2019
Key amendments to the Security Of Payment Act NSW come into effect for all NSW building & construction contracts entered into on or after 21 October 2019
What does this mean for you?
Read more...
Payment Terms
The time for paying payment claims made under the Security Of Payment Act NSW has changed.
A progress payment to be made by a principal to a head contractor must now be paid within 15 working days of a payment claim being served.
A progress payment to be made to a subcontractor must now be paid within 20 working days of a payment claim being served.
Contract Termination
If you are a subcontractor, avoiding termination of your contract means you can continue to continue to claim in accordance with your contract, and or the Security Of Payment Act NSW.
Termination of your contract may have dire consequences for recovering money you are owed for work you have completed.
After termination you are now limited to making one final payment claim.
False Declarations
Penalties for making false or misleading declarations or providing false or misleading information have increased significantly.
: Maximum penalty–
(a) in the case of a corporation–500 penalty units, or
(b) in the case of an individual–100 penalty units.
Other penalties also apply.
What’s Happening
With a number of building companies failing this year it is timely to learn how to prepare Payment Claims made under the Security Of Payment Act NSW and serve them at the right time
As interest rates start to bite be sure to keep your contract admin up to date to ensure disputes are resolved easily using the Building & Construction Industry Security Of Payment Act 1999 NSW.
Building & construction is back full swing for 2022.Keep up to date with Security Of Payment Act NSW changes here. Read contracts carefully and make sure they are signed by both parties
It’s the time of year where everyone’s cashflow is more important than ever leading up to the Christmas break. Don’t ignore Payment Claims served under Security Of Payment Act NSW
As of 1 March 2021 residential building contracts where the homeowner resides in the home are now subject to the Building & Construction Industry Security Of Payment Act 1999 NSW.
Building & construction is back full swing now in 2021 and there are some big changes coming for the industry next month. Keep up to date with Security Of Payment Act NSW changes here.
Building and construction contracts entered into on or after 21 October 2019 fall under the latest changes to the Security Of Payment Act NSW – this is good news for subcontractors cashflow
Security of Payment Act NSW monthly payment claims should also include all previous unpaid amounts – in other words the total of all work completed contract work that hasn’t been paid
Monthly payment claims falling due for lodgment over the next few days need to be checked for validity to ensure they succeed at adjudication – if claims are invaild they may not be paid