• Does the SOP Act apply to this contract?
• What is the earliest date that a payment claim can be served?
• What is the latest date that a payment claim can be served?
• How often can I serve a payment claim?
• What may a payment claim include?
• What must a valid payment claim include?
A payment claim is a claim made under the SOP Act, for a progress payment under a construction contract (or other arrangement) for works performed or related goods and services provided.
Before making a payment claim, there are 2 critical questions to consider:
Does the SOP Act apply to this contract?
The SOP Act applies to MOST contracts to carry out construction works, or to supply related goods and services. The contract (or other arrangement) may be in writing, or oral, or a
combination of both.
The SOP Act does NOT apply to contracts for carrying out domestic building works with a building owner, unless the building owner is in the business of building residences, and the
contract is entered into in the course of, or in connection with that business.
When can I make a payment claim?
What is the earliest date that a payment claim can be served?
A payment claim may be served:
- On and from the last day of the named month in which construction work was first carried out or related goods and services provided; and
- On and from the last day of each subsequent named month that further construction work was carried out or related goods and services provided.
- If the contract provides for an earlier date, on and from that date.
- If a notice of termination is served on a party to a construction contract or a construction contract is terminated by agreement, on and from the day on which the contract provides is the day
on which the contract is terminated. For works performed or goods and services provided between
1 December and 21 December, a progress payment claim may be served on and from 22 December.
- For works performed or goods and services provided between 22 December and 31 December, a payment claim may be served on and from 31 January in the following year.
What is the latest date that a payment claim can be served?
A payment claim under the SOP Act must be served no later than the day before the latest of the following:
- The date (if any) determined under the terms of the contract as the latest day on which a payment claim may be served.
- The date that is 6 months after the practical completion of all construction work to be carried out under the contract.
- The date that is 6 months after the supply of all related goods and services to be supplied under the contract.
Unless a construction contract provides otherwise, a claimant may not serve on a person more than one payment claim in the named month in which construction work was carried out or undertaken to be carried out or related goods or services were supplied or undertaken to be supplied.
| Critical note: Date a payment claim is taken to be served:
If a claimant serves a payment claim on a person before the earliest date (as provided for in the contract, or calculated in accordance with the Act):
• The progress payment claim is NOT invalid.
• The payment claim is taken to be served on the earliest date.
• The time within which a person may serve a payment schedule does not commence until the earliest date. |
How often can I serve a payment claim?
Unless a construction contract provides otherwise, a claimant may not serve on a person more
than one payment claim in the named month in which construction work was carried out or
undertaken to be carried out or related goods or services were supplied or undertaken to be
supplied
What may a payment claim include?
A payment claim may include:
- A claim for more than one progress payment.
- Any amount that has been the subject of a previous payment claim that has not been paid before the subsequent payment claim is served.
- A claim for work carried out of undertaken to be carried out or related goods and services supplied or undertaken to be supplied in a previous named month.
A performance security claim may be served alone or in conjunction with a progress payment claim.
What must a payment claim include?
A valid payment claim must:
- Identify the construction work or related goods and services to which the progress payment relates. (It is critical to provide sufficient information for the respondent to understand what
they are being asked to pay for).
- Indicate the amount of money that the claimant claims is due (the claimed amount).
- State that it is made under the Security of Payment Act Include the following text on the progress payment claim: “This is a payment claim under the Building and Construction Industry Security of Payment Act 2002” (or words to that effect).
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