Making a payment claim under the SOP Act

A payment claim under the SOP Act is a claim for a progress payment.

Before making a payment claim

Before preparing a payment claim, you should ask the following questions.

Does the SOP Act apply to this contract?

The SOP Act applies to most contracts to carry out construction work or supply related goods and services. The contract may be written, oral or a combination of both.

It does not apply to contracts to carry out domestic building work 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?

A payment claim can be served on and from the last day of the month in which construction work was first carried out or related goods or services supplied under a construction contract, and then on and from the last day of each subsequent month.

However, if work is carried out or goods and services supplied between 1 December and 21 December, the claim can be served on and from 22 December. If work is carried out or services are supplied between 22 December and 31 December, the payment claim can be served on and from 31 January the following year.

A payment claim can be served earlier if the contract provides an earlier time for service, but a contract cannot prescribe a later date.

The latest time a payment claim can be served is the later of the time specified in the contract, or 6 months after practical completion of all construction work or 6 months after the supply of all related goods and services to be supplied.

Information required in a payment claim

The payment claim must:

1.  Identify the construction work or related goods and services to which the payment progress relates

To find out what kinds of work and services are covered by the SOP Act, see Security of Payment.

2.  Indicate the amount of money that the claimant claims is due (the ‘claimed amount’)

The payment claim must take into account the contract price for the construction work or supply of related goods and services, any other rates or prices set out in the contract and the estimated cost of rectifying any defect.

3.  Include the 'Security of Payment Statement'

The payment claim must notify the respondent that it is made under the SOP Act.

It must say: 'This is a payment claim under the Building and Construction Industry Security of Payment Act 2002'.

Serving a copy on the respondent

A copy of the payment claim must be served on the client or purchaser (the 'respondent') in the manner (if any) required by the construction contract. In any other case, it can be served by one of the following means:

• by delivering it in person
• by leaving it at the respondent’s ordinary place of business
• by posting it to the respondent’s ordinary place of business
• in any manner instructed by the respondent as being an acceptable manner for service.

The payment claim can also be served on the respondent’s agent.

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