Security of Payment Acts (“SOPA”)
Security of payment’ means enforcing the entitlement of contractors, subcontractors, consultants or suppliers to promptly receive payments due under the terms of their contract.
In general, the security of payment problem relates to the arbitrary devaluation, late payment and/or non-payment of progress claims – which has in the past been a persistent problem for those who perform construction work in, or supply goods and services to, the construction industry.
The “construction industry” includes industrial and commercial (and domestic, with some limitations) building & construction, wherever occurring – including ‘above-ground’ building & construction involved in the mining industry.
All States and Territories in Australia have now introduced legislation (a SOPA) to counter the tactic of some principals and contractors in delaying payments, or unduly reducing the value of payments, so as to enhance their cash flow at the expense of subcontractors and suppliers.