Security of Payment (SOP) laws are the single most powerful tool a tradie has for getting paid. They give you a statutory right to progress payments that sits on top of your contract, kill "pay when paid" clauses dead, and force the other side to make a fast decision — pay now, argue the final account later. Every state and territory has one. Here is how the process works, the strict clocks, and what happens when the other side ignores you.
What SOP actually gives you
- A statutory right to claim and recover progress payments, independent of your contract rights.
- A fast interim adjudication — an independent decision in a matter of weeks, not the months or years a court takes.
- "Pay when paid" is void — a head contractor cannot tell you "I will pay you when the principal pays me."
- An adjudicated amount is enforceable as a court judgment.
Eight Acts, two models
There are eight separate regimes. Most follow the East Coast model (NSW, VIC, QLD, SA, TAS, ACT — and WA since its 2021 Act); the NT keeps the older West Coast model.
| State | Act | Model |
|---|---|---|
| NSW | Building & Construction Industry SOP Act 1999 | East Coast |
| VIC | Building & Construction Industry SOP Act 2002 | East Coast |
| QLD | Building Industry Fairness (SOP) Act 2017 | East Coast |
| SA / TAS | SOP Act 2009 | East Coast |
| ACT | SOP Act 2009 (NSW-aligned since 11 Mar 2024) | East Coast |
| WA | Building & Construction Industry (SOP) Act 2021 (new contracts from 1 Aug 2022) | Hybrid, East-Coast-leaning |
| NT | Construction Contracts (SOP) Act 2004 | West Coast |
The practical difference that matters: on the East Coast model, a valid payment claim with no (or a late) payment schedule means you can be awarded the full claimed amount. The West Coast (NT) model arises from a "payment dispute" under the contract and has no automatic full-claim liability.
Who is covered — and who is not
SOP covers construction work and related goods and services all the way down the subcontract chain (head → sub → sub-sub). The big exclusion is the residential owner-occupier exception: most East Coast Acts carve out jobs where the principal is a genuine owner-occupier living in the home — though developers and investors are back in scope. So most commercial work and subcontracting is covered; a reno for a true owner-occupier generally is not — for that you use ordinary debt recovery or the tribunal (see When a Residential Customer Won't Pay).
The process — claim, schedule, adjudication
- Payment claim. Identify the work, state the amount, and serve it on or after the reference date. Mark it as made under the Act (NSW no longer strictly requires this, but it is good practice). A head-contractor claim on a principal often needs a supporting statement that subbies have been paid — a false one carries serious penalties. Use the SOP Payment Claim template.
- Payment schedule (their reply). The respondent must reply within the statutory window — NSW/VIC 10 business days, QLD/SA/WA 15 — stating what they will pay and all reasons for withholding anything. A reason left out cannot be raised later.
- No schedule = you can claim the lot. On the East Coast model, if they fail to serve a schedule in time they become liable for the full claimed amount on the due date, and are shut out from raising reasons.
- Adjudication. A fast, independent decision. Application windows differ — NSW/VIC 10 business days after the schedule, QLD 30, WA 20 business days — and the adjudicator decides in about 10 business days. The full state-by-state clocks are on the SOP Timelines card.
A worked sequence
A subbie issues a $40,000 progress claim in NSW. The builder serves no payment schedule within 10 business days → the builder is now liable for the full $40k. The subbie gives notice of intention to adjudicate within 20 business days of the due date; the builder gets a 5-business-day last chance to produce a schedule; none comes → the subbie applies for adjudication and is very likely awarded the full amount, fast.
If they still do not pay
You obtain an adjudication certificate from the nominating authority, file it in court as a judgment debt, and enforce it (writs, garnishee). NSW, QLD and SA require payment within 5 business days of the determination.
Time limits to serve a claim
You generally have months — roughly VIC ~3 months, QLD/SA ~6 months, NSW up to 12 months after the work. Do not sit on it.
Common mistakes
- Treating your invoice as "just an invoice" — issue it as a SOP payment claim and the clocks start working FOR you.
- Missing the reference date or serving too late.
- No SOP-ready paperwork — keep daily records, delivery dockets and signed variations.
- Assuming SOP covers an owner-occupier reno — it usually does not.
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