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ARTICLE · 07 MAY 2026

Victoria’s Amended Security Of Payment Act: Recourse And Return Of Performance Security

Holding Redlich
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Victoria's amended Security of Payment Act introduces significant changes to how contractors can claim the return of performance security and limits principals' rights to call on that security. The new statutory framework creates a formal process for security claims and imposes notice requirements that fundamentally alter the commercial risk allocation between parties in construction contracts.

AustraliaReal Estate and Construction
Lachlan Ingram
Lachlan Ingram
Dado Hrustanpasic
Dado Hrustanpasic
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Victoria’s amended Building and Construction Industry Security of Payment Act 2002(Vic) (SOP Act) is now in effect, following the commencement of changes introduced by the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 (Vic) on 15 April 2026.

For the construction sector, the regime now allows a greater scope of claims to be brought through the process and introduces new provisions that affect commercial risk allocation on existing and future construction projects. It also brings Victoria into line with similar laws in other jurisdictions.

Our overview of the key changes under the amended SOP Act provides further context. This article examines the new statutory process for claiming the release of performance security, a mechanism that did not exist under the previous legislation.

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