SOP Act now applies to Owner Occupier Contracts

You've completed a stage of work on an owners home, but the owner disputes your entitlement to a contractual progress payment. You need to protect your cash flow - its your life blood.

Your Site Condition should be - SOP Act, cash flow, payment claim

Law in Point

The NSW Building and Construction Industry Security for Payments Act 1999 (SOP Act) now applies to "owner occupier construction contracts" entered into on and from 1 March 2021.

The legislative purpose of the SOP Act is to give cash flow to builders, subcontractors and consultants by entitling them to receive, and be able to recover, progress payments in relation to the carrying out of construction work and the supply of related goods and services.

A statutory entitlement is granted to receive a progress payment regardless of whether the relevant construction contract makes provision for them.

The SOP Act ensures that a person is able to recover a progress payment by establishing a procedure that involves:

  • Making of a payment claim by the person claiming payment;

  • Provision of a payment schedule by the person by whom the payment is payable;

  • Referral of any disputed claim to an adjudicator for determination; and

  • Payment of the progress payment so determined.

The SOP Act does not limit any other entitlement under a construction contract or any other remedy that a claimant may have for recovering any such other entitlement.

The SOP Act Site Condition

The legislative procedure under the SOP Act is invoked by the making of a payment claim which accords with the Act.

Only one claim can be made for each reference date, which is the date stated in the contract for making claims. If no date is stated, it is the last day of each month. Unpaid money from a previous claim can be included in the next claim.

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