Building & Construction
Security of
Payment claims.
Payment claims, payment schedules and adjudication under the Building and Construction Industry Security of Payment Act 2002 (Vic), for claimants and respondents under the regime in force from 15 April 2026.
Building and Construction Industry Security of Payment Act 2002 (Vic)
Getting paid, faster.
The Building and Construction Industry Security of Payment Act 2002 (Vic) creates statutory rights to progress payments and release of performance security, supported by a fast adjudication process. It can provide an interim payment outcome without waiting for the underlying contract dispute to be finally resolved.
The Act was substantially amended by the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 (Vic). The amendments commenced on 15 April 2026 and generally apply to existing and new construction contracts, subject to transitional provisions for claims and adjudications already on foot.
Timing and document content remain critical. A payment claim, payment schedule, statutory notice or adjudication document must satisfy the Act and be served within the applicable period. We act for claimants and respondents and check the contract, transitional position, service and deadlines before the process begins.
The April 2026 Reforms
What changed and what it means for you.
The Fairer Payments on Jobsites reforms commenced on 15 April 2026 and apply to existing and future construction contracts. Payment claims already served and adjudications already on foot are generally unaffected.
Excluded Amounts Abolished
Victoria's unique 'excluded amounts' and 'claimable variations' regime has been repealed. Variations, delay damages, extension-of-time costs and latent condition costs can now be included in payment claims and adjudications.
Monthly Claims As Of Right
'Reference dates' are gone. A claimant can now serve a payment claim on and from the last day of each month, regardless of what the contract says about claim timing.
Six Months To Claim
The latest claim date is generally six months after practical completion or final supply, unless the construction contract provides a later date.
20-Day Payment Cap
Progress payments are now due no later than 20 business days after a payment claim is served, overriding any longer payment terms in the contract.
Performance Security Rules
A party must give at least five business days' written notice before having recourse to security such as bank guarantees or retention, and contractors have a statutory pathway to have security returned after the defects liability period.
Unfair Time Bars Void
Notice-based time bar clauses can now be declared unfair and void where compliance is not reasonably possible or would be unreasonably onerous, a significant shift for claims previously shut out on technicalities.
The Process
Four steps to resolution.
Adjudication moves quickly. The available step and deadline depend on whether a payment schedule was served, the scheduled amount and whether payment was made.
Payment Claim Served
A claimant serves a compliant payment claim identifying the work or related goods and services and the amount claimed. The Act permits monthly claims and sets an outer claim period, subject to any later date allowed by the contract.
Payment Schedule
The respondent must serve a payment schedule within 10 business days, or any shorter contractual period. It must state the scheduled amount and the reasons for withholding payment; omitted reasons generally cannot be added in an adjudication response.
Adjudication Application
If the respondent fails to provide a payment schedule, schedules less than the claim, or fails to pay, the claimant may apply for adjudication within the strict statutory timeframe.
Determination & Enforcement
The adjudicator generally determines the amount payable within 10 business days after the applicable statutory trigger, subject to a permitted extension of up to a further 20 business days. The determination is binding on an interim basis and can be enforced as a judgment debt if payment is not made.
Time-Critical
Missed deadlines change the available options.
Time limits under the Act are strict. Missing the initial payment-schedule deadline makes the respondent liable for the claimed amount. If the claimant then gives notice of an intention to adjudicate, the respondent may have a final five-business-day opportunity to provide a schedule, but that limited step does not reverse every consequence of the initial default. Adjudication deadlines also depend on what happened before the application. Obtain advice as soon as a claim or notice is received.
Our Services
How we can help.
We advise claimants and respondents on payment claims, payment schedules, adjudication applications and responses, enforcement, performance security and contract administration under the amended regime.
Payment Claims
Drafting and serving payment claims under the Act. The 2026 reforms broadened the amounts that may be claimed, including some variation, delay and extension-of-time amounts. We check entitlement, valuation, timing, endorsement and service before a claim is issued.
- Claim Preparation
- Variations & Delay Costs
- Claim Timing Advice
- Service & Compliance
Payment Schedules
Preparing payment schedules to respond to claims received. Reasons omitted from the schedule generally cannot be added in adjudication, so we test the claim, evidence and contractual response before the service deadline.
- Schedule Drafting
- Dispute Grounds
- Set-Off & Defects
- Deadline Management
Adjudication Applications
Preparing adjudication applications when no payment schedule is provided, the scheduled amount is disputed or payment is not made. We organise the contract, claim, schedule, evidence and submissions around the issues the adjudicator can determine.
- Application Filing
- Evidence Preparation
- Legal Submissions
- Adjudicator Liaison
Adjudication Responses
Defending respondents in adjudication proceedings. We prepare responses within the limits of the payment schedule and address defective work, valuation, set-off and overclaiming issues supported by the available evidence.
- Response Preparation
- Defence Strategy
- Defects Claims
- Quantum Challenges
Performance Security & Time Bars
Advice on the new statutory rules for bank guarantees, retention and other performance security, including the five-business-day notice requirement before recourse, the return of security after defects liability, and challenges to unfair notice-based time bars.
- Recourse Notices
- Return of Security
- Retention Disputes
- Unfair Time Bars
Enforcement & Strategic Advice
Enforcing adjudication determinations through the courts as judgment debts, and advising on how the amended Act interacts with your construction contracts, payment terms, notice regimes and claims strategy across your projects.
- Court Enforcement
- Judgment Debts
- Contract Review
- Payment Terms Audits
Common Questions
Security of payment, answered.
The amended Act is technical and deadline-driven. These answers address recurring questions from contractors, subcontractors, suppliers, principals and others responding to claims.
What is the Building and Construction Industry Security of Payment Act 2002 (Vic)?
Known as SOPA, the Act gives eligible parties who carry out construction work or supply related goods and services a statutory right to progress payments and a fast adjudication process. Contracting out is prohibited, so statutory rights can operate despite inconsistent contract terms. An adjudication determination is binding on an interim basis and can be enforced as a judgment debt.
What changed under the April 2026 reforms?
The Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 (Vic) commenced on 15 April 2026 and generally applies to existing and new construction contracts, subject to transitional rules. The reforms abolished the 'excluded amounts' and 'claimable variations' regimes, replaced reference dates with monthly claiming rights, extended the outer claim period, capped payment terms, regulated recourse to performance security and created a process for unfair notice-based time bars.
Can I claim variations, delay costs and extension-of-time costs now?
The April 2026 reforms removed the former 'excluded amounts' and 'claimable variations' regimes. Variation, delay, extension-of-time and latent-condition amounts are no longer excluded merely because they fall within those former categories. The claimant must still establish contractual entitlement, valuation, evidence and compliance with the other statutory requirements.
When can I serve a payment claim?
The amended Act permits a claim on and from the last day of each named month in which construction work was carried out or related goods and services were supplied, subject to the December exception and the rule against more than one claim in a month. The latest date is generally six months after practical completion or final supply, unless the contract allows a later date.
How quickly do I need to respond to a payment claim?
A respondent must serve a payment schedule by the earlier of the contractual period or 10 business days after receiving the payment claim. The schedule must state the amount proposed for payment and the reasons for paying less. Under the amended Act, reasons not included in the schedule generally cannot be raised later in an adjudication response.
What happens if no payment schedule is provided?
The respondent becomes liable for the claimed amount on the due date. The claimant may pursue court recovery, adjudication and, where the Act permits, suspension. Before adjudication following no initial schedule, the claimant must generally give written notice of the intention to apply; the respondent then has five business days to provide a payment schedule. That limited opportunity is not available in every recovery path and should not be treated as an extension of the original deadline.
How long does adjudication take, and when must the money be paid?
Adjudication is designed to be fast. The adjudicator generally determines the matter within 10 business days after accepting the nomination or after the date the respondent may lodge a response, as applicable. That period may be extended by up to a further 20 business days. Separately, the amended Act generally requires a progress payment to fall due no later than 20 business days after service of the payment claim. Judicial review is available only on limited public-law grounds, and the effect of any error depends on the circumstances.
Does the Act apply to residential building work?
It applies to most commercial construction work, subcontracts and the supply of related goods and services. It generally does not apply between a builder and a resident owner-occupier under a domestic building contract, but it does apply down the chain, so subcontractors and suppliers on residential projects are usually covered. We can advise quickly whether your contract falls within the regime.
Can I suspend work if I have not been paid?
SOPA can provide suspension rights in particular circumstances, but the claimant must comply with the statutory notice requirements and timing. Suspension without a valid basis can create contractual exposure. We check the payment claim, due date, schedule position and notice before recommending suspension.
Can a payment schedule raise new reasons later?
The payment schedule should include every reason for withholding payment and enough detail to support the scheduled amount. Under the amended Victorian regime, reasons omitted from the schedule may be unavailable in adjudication. Respondents should treat the schedule as a critical legal document, not a routine accounts response.