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Recent Changes to the Security of Payment Act (NSW)

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Be informed of the relevant changes to the Security of Payment Act in NSW, affecting construction contracts entered into on or after 21 October 2019.

Table of Contents

When Did These Changes Come About?

1. In November 2018, an Amendment was passed (the “Amendment Act”), instituting several changes to the NSW Building and Construction Industry Security of Payment Act 1999 (Security of Payment Act or “SOPA”). These changes were implemented on 21 October 2019.

2. On 1 March 2021, another change was made to the SOPA. These changes were applied to contracts entered into on 21 October 2019 and after.

Both the 2018 and the March 2021 amendments apply to construction contracts entered into on or after 21 October 2019

How Will These Changes Affect Me?

The changes as of 1 March 2021 affect homeowners, who are now included in the SOPA process.

The changes as of November 2018 (commenced on 21 October 2019) affect claimants, primarily subcontractors.

Key Changes

Under the 2018 Amendment

Most Recent Change

The most recent change to the SOPA came about in 1 March 2021, but affect “owner occupier contracts” entered into on or after 21 October 2019. 

Under this change, owner occupiers will no longer be exempt from the Act. Previously, SOPA only applied to commercial building contracts.

Under the Home Building Act 1989 (NSW), an “owner occupier contract” is a residential building contract between a builder/tradesperson and a homeowner.

Process Flow Under the March 2021 Amendment

The builder likewise has the option of bringing a collection case to court, instead of Adjudication, or after Adjudication proceedings, if they are unsatisfied with the result.

With this change, homeowners may now need to engage a specialist construction lawyer to help them respond to payment claims, and assist with Adjudication, or represent them in litigation.

How We Can Help

Contracts Specialist has over 10 years experience in debt recovery and Security of Payment. Should you wish to learn more about how to enforce your claim under the Act, or should you require assistance in facilitating your payment claims, feel free to give us a call. Your first consult is free. 

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Contracts Specialist is a Sydney-based construction law firm that deals with Building Disputes, Construction Contracts, Debt Recovery, and Security of Payment. With Contracts Specialist, you are ensured that you are in good hands.

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