Private Prompt Payment Act Flashcards
How much time does owner have to pay contractor?
35 days from pay application.
How much time does a Contractor have to pay its subcontractor and a subcontractor to pay its subcontractor?
7 days after receiving payment from owner or GC.
for payment attributable to its work.
How much can be withheld for a good faith dispute?
110% for residential and 100% for commercial of the disputed amount.
Can you recover attorneys fees under Prompt Payment Act
Yes, but they are discretionary.
Can a contractor waive the PPA by contract?
Yes for residential, payment can be modified to 61 days but may bear interest at 1.5%. NO FOR COMMERCIAL PROJECTS.
Extension of owner payment to Contractor with lender involved.
1) when owner has obtained a loan for the work;
2) owner has timely requested the loan disbursements and
3) lender is legally obligated to disburse funds but has failed to do so. Under these circumstances, the owner has 5 days from the date the lender disburses the funds.
Contractor’s/Subcontractor’s right to suspend work.
If owner fails to timely pay and contractor has given written notice to owner and lender that: (1) payment has not been received; (2) intent to suspend performance for nonpayment. Only have to notify lender if lender has properly posted its information at site and there is a recorded deed of trust for the loan.
After serving a notice of suspension, is a contractor required to supply further labor or material to the project?
No and is not required to return until paid for the unpaid work and cost for demobilization/mobilization.
Is a contractor/subcontractor responsible for damages resulting from the suspension?
No, if the contractor/subcontractor had not been notified in writing before suspension that payment has been made or that a good faith dispute exists.
What must be in a notice of a good faith dispute?
The specific reasons for nonpayment.
Does contractor/subcontractor have an opportunity to cure good faith dispute?
Yes, upon notice of the specific reasons withholding payment, con/sub should have a reasonable opportunity to cure the listed items or offer a reasonable amount to compensate for the listed items that cannot be cured. This section (the right to suspend work) does not apply to residential properties.
Does Right to Suspend work apply to residential work?
NO.
Does the Prompt Payment Act apply Oilfield Service?
No.
