Security of Payments Act: Business and Construction Industry Security of Payments Act, 1999

Running Head: SOPA 0
Security of Payments Act.
Business and Construction Industry Security of Payments Act, 1999
Student Name
Student Number

SOPA 1
Table of Contents
Security of Payment Act............................................................................................................2
Question 1:.............................................................................................................................2
Question 2:.............................................................................................................................5
Question 3:.............................................................................................................................7
Question 4:.............................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

SOPA 2
Security of Payment Act
In NSW Property Council, the topic of discussion of this segment shall be the Building and
Construction Industry Security of Payments Act, 1999 and the amendments made herein in
the later years. This
The Building and Construction Industry Security of Payments Act, 1999 also widely known
as Security of Payment Act (SOPA) is a specific legislation for New South Wales (NSW). It
has been amended various times through the years as per the requirements. This act came into
existence with the thought of reducing the common occurrence of bankruptcy in the
construction industry. This act does so by; advising a proper method that is recognized by
statutes to recover progress payments; and also, provide contractors with protection and
specific rights (Lawpath, 2016).
It is a convenient and cost-efficient process that helps the consultants, suppliers, contractors,
sub-contractors and people as such. It safeguards the continuity of payment to the workers of
construction industry who have a validated construction industry contract. Every state and
territory throughout Australia, has adapted to this legislation of security of payment, though,
there are some dissimilarities from state to state (Turtons, 2019).
Question 1:
The first thing here that needs to be done, is to identify that the claim or the contract has a
clause stating it, to be allowed under SOPA, or if it allows taking action under the
abovementioned act.
It basically starts with the mention of a reference date, this date is set by both the parties to
the claim mutually. If a date is not set mutually, a default date will be set, which is after a
period of a month, preferably by the end of the month; from the last payment or, from the
date the work was completed or goods were delivered (Masson, 2018).

SOPA 3
Within 10 days of payment claim being served, the respondent has to serve a payment
schedule. In cases where, the payment schedule is not served in order by the respondent as
well as when the amount due is still unpaid, the claimant can discontinue the work after
providing a 2 days business notice. Now the claimant has two options, either to go ahead with
adjudication or to proceed with court proceedings, where they can file a section 15 summary
as summary judgement. When the claimant proceeds with the adjudication, as per the section
17(2), the claimant is supposed to submit the adjudication notice 20 days after the due date of
the payment has passed and the amount has not been paid yet. After which the respondent has
to reply to the adjudication notice within 5 business days from when it is received with a
fixed payment schedule.
Now what happens when the respondent, within 5 days, does not tend to the order of serving
the payment schedule or if the payment schedule served is not adequate and rejected by the
claimant?
The claimant can then serve an adjudication application within 10 days after waiting for the
respondent to respond.
If the payment schedule has been accepted by the claimant then on the due date if the
respondent does not pay the amount due, then the claimant shall file for the adjudication
application within 20 business days after the due date. If the court proceedings are opted for
the claimant then they shall file a Section 16 Summary Judgement (Building & Construction
Industry Security Of Payments Act: Powerful Legislation, 2019).
A proper flowchart describing the above description is given below: