What is the SOP Act?

The SOP Act (short for Building and Construction Industry Security of Payment Act 2002) is a law which ensures that persons who perform construction work, supply related goods, and render related services in Victoria, are always paid. 

It does away with the “pay when paid” or “paid if paid” system, where one would only get paid, if their payor first gets paid. 

The SOP Act covers most construction contracts, including oral contracts and partly-oral, partly-written ones.

It does not include domestic building contracts between a builder/supplier and a homeowner.

The Security of Payment Scheme: An Overview

The SOP Act enables you to claim progress payments by simply serving a “Payment Claim” on the person who owes you money. Under the Security of Payment scheme, you may be referred to as the “Claimant,” and the person owing you money may be referred to as the “Respondent.”

Process Flow

What if Respondent disagrees with the claimed amount, but does not serve a Payment Schedule?

Respondent becomes liable to pay the full amount of your claim, which is enforceable in court. Additionally, they may not be able to participate in an adjudication process, should you commence the same.

What are my other options as far as enforcing my claim is concerned?

1. You may commence adjudication proceedings in one of the following instances:
  • Respondent serves a Payment Schedule because he intends to pay less than the amount you’ve claimed.
  • Respondent serves a Payment Schedule but does not pay the scheduled amount.
  • Respondent does not serve a Payment Schedule and does not pay your claimed amount by the due date.
2. If you’ve gone through adjudication and still remain unpaid, you can request for an Adjudication Certificate and lodge a complaint in court for collection of the outstanding amount.
3. Another option would be to suspend the work until the amount is paid, which must be done in accordance with the SOP Act.

How We Can Help

If you have performed construction work or supplied related goods or services under a construction contract in Victoria, and are struggling to get paid, our specialist construction lawyers can help you enforce your claim through the Security of Payment scheme.

If you would like to learn more, feel free to give us a call. Your first consult is free.