What benefits does the Security Of Payment Acts bring?
There are several benefits of the SOP Acts if utilised properly. To list them all for you would most likely result in a swift exit by our readers, so instead, here are some of the key benefits:
- It offers a very clear process to follow with regards to invoicing, receiving payments or resolving disputes about invoices
- It often means resolving disputes within a much shorter time frame compared to taking ordinary legal action through a court
- It offers a much more cost effective way of resolving disputes, again compared to taking ordinary legal action
The SOP Acts automatically apply to construction contracts. What does that mean? If you play in the construction space, you need to understand the key features and how to use the Acts to your advantage.
Problems we see?
We commonly see that sub-contractors issue invoices and/or payments claims thinking that they’re in accordance with the SOP Acts. Often, they’ve misunderstood what that actually means or how to actually enforce their legal rights thereafter. There are strict time frames which must be followed, otherwise you will be ‘timed out’ altogether. There are also strict requirements for what information must be included in the payment claims, secondary notices and payment schedules. Any small omission may render your claim or notice invalid and then be precluded from the remedies available to you under the Acts.
Essentially what this means is that you need to know what you’re doing down to the small details when it comes to the SOP Acts to receive any benefit from them at all. Our approach is to assist our clients by providing templates and flowcharts, ensuring that the SOP Acts can be easily followed and enforced. We like to sit down with the business owner and their accounts team, contract manager, and whoever else needs to know the ins and outs of the process, to educate and arm you with the knowledges to correctly use the Acts.
As always, we’d love to hear from you. Head here to make time for a chat.