In our last article we introduced the Security for Payment legislation through the Building and Construction Industry Security of Payment Act (NSW) 1999 (“SOPA”) whereby creditors can enforce progress payments in accordance with their contract.
In this article, we look at the SOPA process and what you need to know to successfully navigate it to recover the money owed to you for work carried out.
Have you issued a progress payment?
A progress payment is the issuing of an invoice for the first stage of a contract being complete, i.e. in building a house it may be the pouring of the slab and preparation of foundations.
What happens if they dispute the progress claim?
There is an adjudication notice requirement to the debtor required under section 17 (2) of SOPA to commence the adjudication application process. The adjudication process allows you as the contractor to recover the disputed or unpaid progress payment.
An independent third party is appointed to review the adjudication application presented.Once the requisite time period has lapsed for the response to be made by the debtor, the adjudicator determines the application. Please note that neither party is required to appear at the adjudication, it is determined on the written documents. A determination is usually made within 10 days of the adjudication response required. Upon receipt of an adjudication determination, the debtor is required to pay the adjudicated amount. The SOPA process is then completed.
In the next article, we will look at your options if the SOPA process is not successful after an adjudication application has been made. Who pays what in SOPA? Is there an appeals process? What is the impact of an outcome of the SOPA process? Stay tuned for the next article!
If you have further questions, please contact us at frank@franklaw.com.au.
This is not legal advice.