What is Arizona’s Prompt Payment Act?

What is Arizona’s Prompt Payment Act?

On Behalf of | Feb 3, 2022 | Construction Law |

Contractors provide a valuable service to residents of Arizona. These individuals often work on a fee schedule that requires only a partial payment upfront. The rest of the money is given on a specific schedule with the final payment due after the project is completed.

When a contractor finishes work before being paid, they need to know that they’ll be able to collect on the monies owed to them. The Arizona Prompt Payment Act provides this protection. It offers specific guidelines for private projects and public projects.

What are the protections for private projects?

Private pay projects must typically be paid by the project owner to the primary contractor within seven days of the approval of the invoice. There’s a 14-day approval timeline for invoices.

The primary contractor has seven days after the payment from the property owner to pay the subcontractors and suppliers. If there are multiple levels of subcontractors, each level will have a 7-day waiting period after the previous level was paid.

It’s possible that a construction contract may be different from this timeline. When that occurs, the terms of the contract are followed as long as it’s a legally binding contract. Each contract in a construction project is treated independently.

All contractors in Arizona have the right to be paid promptly. Making claims under the state’s Prompt Payment Act can be a complex undertaking. It’s best to work with someone who’s familiar with these claims so you can draw from their knowledge. You should do this as quickly as possible once realize you haven’t been paid as anticipated.