What is SOPA section 24 and how does it help an owner?
Section 24 of the Security of Payment Act lets the principal of a respondent pay a claimant directly when the respondent fails to pay an adjudicated amount. In practice, an owner can pay a subcontractor who holds an unpaid adjudication determination against the main contractor, after serving a notice of payment and giving the main contractor 2 days to show proof of payment. The owner may then deduct the payment from what it owes the main contractor or recover it as a debt.
From the RRD Field Guide, checked against the sources cited in Contractor Insolvency in Singapore: How Owners Protect Themselves If the Contractor Goes Bust. General information, not advice for your project.
The fuller picture
If your contractor becomes insolvent, the money you have not yet paid is your main protection. Pay only against work done, hold a performance bond and check its expiry, keep the right to terminate and step in, and use SOPA section 24 to pay unpaid subcontractors directly where needed. Anything the insolvent contractor still owes you becomes a proof of debt in its liquidation, usually recovered at a fraction.
More questions on this topic
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