Security of Payment: progress-claim traps for tradies

Security of Payment laws exist because tradies and subbies were too often doing the work and then waiting, or never getting paid at all. The laws give you a fast track to the money you are owed for work already done. They are powerful, but they are technical, and small mistakes on a claim can cost you the protection. This is general guidance, not legal advice, so check your own state's act before relying on it.

What the laws are for

Every state and territory has its own Security of Payment (SOP) act. The detail varies, but the purpose is the same: make sure people who do construction work get progress payments without having to sue. The acts do two main things:

• They give you a statutory right to progress payments for construction work, even if the contract is silent on it.
• They set up a fast adjudication process so a payment dispute can be decided by an independent adjudicator in weeks, not the years a court case can take.

The catch is that these rights come with strict steps and tight deadlines. Get the steps right and you have a strong, fast tool. Miss a deadline and you can lose it.

How a claim flows

The shape is similar across states, even though the names and timeframes differ:

1. You serve a payment claim for work done, usually each progress stage. In some states this must reference the act or use particular wording.
2. The other side serves a payment schedule if they intend to pay less than claimed, within the time the act allows. The schedule has to say how much they will pay and why.
3. If they do not schedule, or do not pay the scheduled amount, you can pursue the debt or apply for adjudication.
4. An adjudicator decides how much is payable, quickly, based on the claim and response.

The payment schedule step is where a lot of money changes hands. In several states, if the paying party fails to serve a payment schedule in time, they can become liable for the full amount you claimed. That is a powerful lever for you, and a serious trap for anyone who pays late and ignores claims.

The traps that lose claims

Most lost SOP claims are not lost on the merits. They are lost on process. Watch for these:

• Missing the reference date or claiming too often. The acts generally entitle you to make a claim from set reference dates. Claiming at the wrong time, or twice for the same date, can invalidate a claim in some states.
• Vague scope on the claim. An adjudicator can only value what you can describe. A claim that does not clearly identify the work done is easy to knock down.
• Late service. Both serving your claim and responding to a schedule are time-bound. Diary the deadlines the moment a job starts.
• Wrong wording or labelling. Some states need the claim to state it is made under the act. A formatting miss can cost you the statutory route.
• No paper trail for variations. If extra work was agreed verbally, valuing it in a claim gets messy fast. Written, accepted variations make claims far stronger.

Why your quote and records do the heavy lifting

Almost every SOP trap traces back to weak records: unclear scope, undocumented variations, fuzzy dates. The defence is boring but effective. Quote with a clear scope, log every variation in writing with a date and an acceptance, and keep your progress claims tied to that scope. When a claim is challenged, you want a clean, dated trail from quote to variation to claim.

That is exactly the kind of record-keeping a quoting and job tool should do automatically: each progress claim linked to the agreed scope, variations stamped and accepted, dates captured as you go. You stay focused on the build, and if a payment ever goes to adjudication, the paperwork already backs you up. For the specifics of timing, wording and exclusions in your state, check your state's act or get proper legal advice before you act.