A Comprehensive Guide to Section 18(2) and Notice of Intention under the Security of Payment Act

A Comprehensive Guide to Section 18(2) and Notice of Intention under the Security of Payment Act

When it comes to navigating the intricacies of adjudication under Section 18(2) of the Security of Payment Act (SOP Act), ensuring compliance with the procedural requirements is crucial. Let’s delve into the key aspects and essential information surrounding Section 18(2) notices.

Understanding Section 18(2): The Basics

Section 18(2) imposes specific obligations on claimants seeking adjudication. To initiate the process, a claimant must:

1. Notify the respondent of their intention to apply for adjudication within 10 business days following the due date for payment.
2. Provide the respondent an opportunity to furnish a payment schedule within 2 business days after receiving the notice.

When is a Section 18(2) Notice Required?

A Section 18(2) notice is necessary under the following circumstances:

• The respondent fails to provide a payment schedule.
• The respondent neglects to pay the full or partial claimed amount by the due date for payment.

In such cases, a claimant is barred from making an adjudication application unless the requisite notice under Section 18(2) has been served on the respondent.

Timely Submission is Key

Crucially, the Section 18(2) notice must be delivered to the respondent within 10 business days immediately following the due date for payment. The due date is determined by the contract or, if unspecified, 10 business days after the payment claim is made.

Adjudication Application Process

Following the notice period, a claimant can proceed with an adjudication application within five business days after the conclusion of the 2-day notice period. It’s essential to note that the application should not be made before the end of this notice period.

Serving the Section 18(2) Notice: Procedural Insights

A Section 18(2) notice can be served through various channels, including in-person delivery, lodging during normal business hours at the respondent’s ordinary place of business, posting, or faxing as specified in the contract. It’s important to remember that the notice is officially served upon receipt by the respondent or at their ordinary place of business. For posted notices, service occurs two business days after posting, while faxed notices are considered served immediately unless sent after 4 pm, in which case service is the next day.

Completing the Section 18(2) Notice: A Checklist for Claimants

When preparing a Section 18(2) notice, claimants should ensure the following details are accurately included:

1. Claimant’s Details: Name and contact details of the contracting party with the respondent.
2. Respondent’s Details: Name and contact details of the respondent.
3. Payment Claim Details: Information to identify the project or site, contract number, claimed amount, due date for payment, and date of service of the payment claim.
4. Notice Requirements: Adequate notification of the intention to apply for adjudication, advice on the opportunity for the respondent to provide a payment schedule, and notification of the claimant’s right to make an adjudication application within five business days after the notice period.
5. Signature of Claimant: Confirmation of the accuracy of provided details through a signature.

By adhering to these guidelines, claimants can navigate Section 18(2) effectively, ensuring compliance and positioning themselves for a successful adjudication process under the Security of Payment Act.