SOP Act Statement

SOP Act Statement - NSW Payment Claim Guide | Contracts Administrator

SOP Act Statement in NSW Payment Claims

📅 Updated: July 2025 ⏱️ 8 min read 📋 Payment Claim Best Practices

⚠️ Compliance Warning

The absence of a valid SOP Act statement can render your payment claim unenforceable, stripping it of all protections under the Act.

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1. Field Name and Definition

The SOP Act Statement is a mandatory declaration that must appear on every payment claim submitted under the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Act"). This statement explicitly identifies that the payment claim is being made pursuant to the Act's provisions, thereby invoking the statutory rights and protections available under this legislation.

This field serves as a critical jurisdictional trigger that transforms an ordinary invoice or payment request into a statutory payment claim with enforceable rights under the Security of Payment regime. Without this statement, your document may be treated as a standard commercial invoice rather than a payment claim under the Act.

3. Practical Guidance

Step-by-Step Instructions

  1. Placement: Include the statement prominently on your payment claim, preferably in the header, near the claim reference number, or above the total amount claimed.
  2. Wording: Use clear, unambiguous language. See examples below for recommended phrasing.
  3. Formatting: Make the statement clearly visible by using bold or larger font, or placing it within a text box to ensure it stands out.

Where to Find Information

  • The Act is available on the NSW Legislation website.
  • Industry associations often provide template wording.
  • Legal advisers can provide jurisdiction-specific guidance (Note: we do not provide legal advice).

4. Common Mistakes and How to Avoid Them

Typical Errors

  • Ambiguous Wording: Using vague phrases like "This invoice is submitted for payment under relevant legislation". Always reference the specific Act.
  • Wrong Jurisdiction: Referencing Victorian or Queensland Security of Payment legislation on a NSW-based claim.
  • Buried Statement: Hiding the statement in fine print or deep within the terms and conditions. It must be prominent.
  • Conditional Language: Using uncertain terms like "This may be a payment claim under the Act". Be definitive.

Best Practices

  • Create a standard template with the correct statement pre-included.
  • Review the statement for accuracy before every submission.
  • Ensure consistency across all payment claims for a project.
  • Train all relevant staff on the importance and correct usage of this statement.

5. Risks of Not Including This Information

Without a proper SOP Act statement, your payment claim may be invalid, leading to significant risks:

Legal & Financial Risks

  • You cannot pursue adjudication if payment is disputed.
  • The respondent has no obligation to provide a payment schedule.
  • You lose the "pay now, argue later" protection afforded by the Act.
  • Delayed payment as you may need to reissue the claim correctly.
  • Lost interest on overdue amounts and inability to recover adjudication costs.

Dispute & Strategic Risks

  • Respondents may ignore claims without proper statements, increasing the likelihood of disputes.
  • Your negotiation position is significantly weakened.
  • In any proceedings, adjudicators may lack jurisdiction, wasting valuable time on preliminary issues rather than the merits of your claim.

6. Examples

Properly Completed Examples

Example 1:
"This payment claim is made under the Building and Construction Industry Security of Payment Act 1999 (NSW)"
Example 2:
"This is a payment claim pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW)"
Example 3:
"Payment claim made under the Security of Payment Act 1999 (NSW)"

8. Frequently Asked Questions

Q: Can I use abbreviations like "SOP Act" in my statement?
A: While courts have shown some flexibility, best practice is to use the full name of the Act at least once. "Security of Payment Act 1999 (NSW)" is an acceptable shortened version. Avoid non-standard acronyms to prevent ambiguity.
Q: What if my invoice template doesn't have space?
A: You must modify your template. The minor effort to redesign your invoice far outweighs the significant risks of submitting a non-compliant claim. Add a dedicated header or ensure it's prominent near your business details.
Q: Do I need this statement on every page of a multi-page claim?
A: The statement must appear at least once, preferably on the first page. Including it in the header or footer of each page is a good practice to prevent disputes about which pages form part of the claim.
Q: What if I forgot the statement but the respondent paid anyway?
A: While payment resolves the immediate issue, you have lost all Security of Payment protections for that claim. If a dispute arises later about that payment (e.g., a clawback attempt), you cannot rely on the Act's provisions. Always include the statement.

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