Statutes require payment within defined periods after an approved application, permit withholding only for specified reasons, and impose interest and attorney fees for violations. Coverage extends to public and in many states private projects.
Some provisions cannot be waived by contract.
Alternative Names:
Prompt Payment Statute|Construction Prompt Payment Law
Why it Matters?
Interest and fee provisions convert a payment dispute into an exposure exceeding the amount withheld, which is the statutes' intended effect and a consideration owners frequently overlook when holding funds over minor disputes. Several states prohibit contractual waiver of prompt payment rights, so a clause purporting to override the statute is void. Documenting the specific basis for any withholding is what defends against the penalty.
Frequently Confused with
Related terms
Frequently asked questions
What is the exposure for improper withholding?
Can prompt payment rights be waived?
