Contractors Right to Payment

The Pennsylvania Contractor and Subcontractor Payment Act provides contractors and subcontractors special protection to collect payments due.  The Act does not apply to residential construction projects involving six or fewer residential units under construction simultaneously.

Contractors and Subcontractors are provided the specific right to:

  1. Payment if the contractor performs pursuant to the contract.
  2. Payment of interim and final invoices within twenty (20) days, if no other payment terms are in the contract.
  3. Payment for subcontractors within fourteen (14) days after the contractor’s receipt of a payment from the owner, or of the subcontractor’s invoice, whichever is later.
  4. The release of any retainage within thirty (30) days after final acceptance of the work.
  5. Interest on past due payments of one percent (1%) per month, or twelve percent (12%) per year beginning on the eighth day after payment is due.
  6. Penalties equal to one percent (1%) per month, or twelve percent (12%) per year of payments wrongfully withheld, if the contractor has to commence litigation to collect.  Along with the interest, this amounts to an additional 24% per year.
  7. Reimbursement of reasonable attorney’s fees to “the substantially prevailing party” in any collection matter.

The foregoing does not limit the right of owners or prime contractors to withhold payment for deficiency items, or items not yet satisfactorily completed in accordance with the terms of the contract, provided that owner or prime contractor provides notice of the deficiency item within seven (7) days after receiving the invoice.

If you need help getting paid or would like more information, please contact our office (267) 247-5766.


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