Construction Contract Prompt Payment Law

When you work for yourself and you are your own boss, getting paid can be a challenge. This is especially true in the construction industry. Customers, especially private parties, often delay payment for as long as possible, causing stalled projects as well as immense frustration.

The good news is that, as a general contractor, the law may be on your side. Some states have prompt payment laws in place to ensure that builders get paid for the work they completed.

Florida has what is called Construction Contract Prompt Payment Law. This law is outlined in Florida Statutes Section 715.12. It applies to written contracts improving real property. There are different requirements for private clients vs. public jobs.

For private projects, owners must pay contractors within 14 days of the project’s substantial completion or when a payment is due under the contract, provided the contractor has met all requirements. For public projects, the timeline varies by entity: state government payments are due within 30 days of the request, while local government payments are often due within 25 days after invoice approval. Here is a look at what the law says in more detail.

Private Projects 

An owner must pay the contractor the final balance within 14 days after one of the following occurs:

• The architect certifies substantial completion, a punchlist is provided, and the contractor finishes all punchlist items.
• A certificate of occupancy is issued, a punchlist is provided, and the contractor finishes all punchlist items.
• The owner or a tenant takes possession, a punchlist is provided, and the contractor finishes all punchlist items.

For progress payments, the law requires the owner to pay within a specified timeframe after the contractor submits a written request for payment. The exact timeframe depends on the contract, but it’s typically faster than final payments.

The law also requires that undisputed amounts be paid to subcontractors within the longer of 30 days after the payment is due under the contract or 30 days from receipt of the invoice.

Public Projects

For state government projects, full payment is due within 30 days after the state receives a request for payment. For local government projects, payments are often due within 25 days after final invoice approval, or 20 days if no approval is needed.

What Happens When Payment is Late?

For both private and public projects, if a payment is late, it will bear interest at the rate specified in the contract or the statutory judgment interest rate, whichever is greater. The prevailing party in a legal dispute over payment may be entitled to attorney’s fees.

Contact Us Today

Payment can be a touchy subject in any industry. Individuals and companies want work done quickly, but getting paid in a timely manner can be challenging.

A Florida contractor representation lawyer from Linkhorst Law Firm can assist you when you need help with legal matters in the construction industry. We are fully prepared to protect and promote your interests. To schedule a consultation, call561-626-8880 or fill out the online form.

Source:

leg.state.fl.us/STATUTES/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0715/Sections/0715.12.html