NSW Security of Payment Changes – The future of the SOPA in NSW

In 2018, the New South Wales Parliament passed the Building and Construction Industry Security of Payment Amendment Act 2018, which makes a number of important amendments to the SOPA.

These amendments are yet to come into force, but the act is scheduled to commence on 21 October 2019, therefore it is important that you and your contracts are prepared.

The major changes to the SOPA can be summarised as follows:

1. The time given for a progress payment to a sub-contractor has been reduced from 30 business days after the payment claim is made to 20 business days after the payment claim is made.
2. The right to submit payment claims is no longer triggered by reference dates , alternatively the claimant will be able to make a payment claim on and from the last day of the month in which the construction work was first carried out, or an earlier date as provided by the contract.
3. Penalties for a head contractor serving an unjustified or false payment claim on the principal have been greatly increased for corporations (1000 penalty units). If a corporation commits these offences, it also attracts liability against the director of the company and not just against the corporation itself. The penalty remains the same for individuals (200 penalty units).
4. If the respondent has not provided a payment schedule and you want to submit an adjudication application, you now have to specifically provide written notice, i.e., you can’t simply phone them.
5. Provisions for the withdrawing of an adjudication application in circumstances other than when the application is refused.
6. If the respondent is entitled to lodge an adjudication response, the adjudicator must decide the adjudication within 10 business days from either the date they submit the response, or the last date on which they could have submitted a response. If they are not entitled to submit a response, the previous time limit applies.
7. Payment claims will now require endorsement stating that they are made under the Building and Construction Industry Security of Payment Act 1999 (NSW).
8. Jurisdictional error in one part of a adjudication decision will no longer necessarily make the whole decision void.

Some of these are a big deal.

Are you ready?