Prompt Pay Act
Georgia Construction Law Firm
The Georgia Prompt Payment Act strengthens the rights of contractors, subcontractors and materialmen working on construction projects throughout the state; similarly, the Federal Prompt Pay Rule enhances the rights of contractors, subcontractors and materialmen working on federal public contracts. In other to maximize the benefits of these statutes, however, it is imperative to engage the services of a Georgia construction lawyer who is familiar with all of the rights and benefits of the Prompt Payment Acts, filing a mechanics and materialmen’s liens, filing payment bond claims as well as other contractual remedies which you may have. The construction attorneys at the Cobb Law Group have handled thousands of matters on behalf of contractors and suppliers, and our experience is unequaled anywhere in the state!
Prompt Payment Acts are just one of the possible remedies which a contractor, subcontractor or supplier may have. It’s important to understand the benefits and the application of Georgia’s Prompt Pay statute as well as all of the other remedies which may be available to a construction professional who has not been paid for its services or materials. Enforcing rights under these statutes increases the likelihood that a claimant can recover pre-judgment interest and attorney’s fees.
Enforcing a claimant’s rights under the payment statutes is not uniformly applicable–there are different deadlines which depend upon whether the claimant works directly for the project owner, the general contractor or a specialty subcontractor. We understand all of these differences and can properly use the various prompt pay statutes in our representation of you if you have not received payment for your labor, equipment or materials. The Cobb Law Group maintains two offices in Georgia, and we represent clients virtually everywhere in the state! To speak with one of our prompt payment act lawyers, please email us or call us at 1-866-960-9539 today.
How Does the Georgia Prompt Payment Act Benefit a General Contractor?
If a general contractor has fully performed under the terms of its contract with the project owner/developer including the completion of any conditions precedent, the Georgia Prompt Pay statutes require that the owner pay the contractor within 15 days of its receipt of a pay request. The owners have rights too, of course, and an owner may be entitled to withhold funds for certain reasons including unsatisfactory job progress, disputed work, third party claims (including threat of filing a materialman lien claim or payment bond claims), and retainage if allowable by contract or law.
How Does the Georgia Prompt Payment Act Benefit a Specialty Trade Subcontractor or Material Supplier?
If a subcontractor (or materialman) has fully performed under the terms of its contract with the general contractor (or subcontractor), then the Georgia code requires that the general contractor (or subcontractor) pay the subcontractor (or material supplier) within 10 days of receipt of each periodic payment, construction draw, or final pay request. Of course, the general contractor has rights also which include the ability to withhold payment for defective work, the filing of construction liens (or the threat of filing liens or making a payment bond claim) or retainage. In addition, a general contractor is entitled to require that the subcontractor or supplier provide a lien waiver as a condition of receiving payment.
Does the Georgia Prompt Payment Act Apply to Every Construction Project?
No, the prompt payment statute specifically excludes improvements intended for residential purposes which consists of 12 or fewer residential units. Also, on Georgia public projects, the prompt payment statute does not apply to small municipalities (for example, Georgia counties with populations less that 10,000 or municipalities with a population less than 2,500).
Can Interest and Attorney’s Fees be Included in a claim under the Prompt Payment Act?
Yes, prompt payment statutes allow claimants to include (and, more importantly, collect!) pre-judgment interest on their claims. It is important to note that the prompt payment statute’s interest provisions do not negatively affect the interest which may be due on a commercial account which may allow for a higher rate, for example. Furthermore, in an action to enforce a prompt payment claim, the prevailing party is entitled to recover reasonable attorney fees. Thus, utilizing Georgia’s Prompt Payment Act may be a party’s best way to collect interest and attorney’s fees if they lack a written contract or if the written contract is silent regarding interest and attorney’s fees.
How Does Prompt Pay Work on Federal Public Works Projects?
Similar to the Georgia Prompt Pay statutes, if there are no valid reasons for withholding payment, payment is supposed to be made to general contractors within 14 days of the receipt of the interim construction draw request and, for a final payment request, within 30 days after final acceptance; in turn, general contractors are supposed to pay subcontractors (and subcontractors are supposed to pay their lower tier sub-subcontractors and equipment and material suppliers) within 7 days of their receipt of payment.
Where Can I Find a Copy of the Prompt Pay Statutes?
The Georgia Prompt Payment Act is codified at O.C.G.A. § 13-11-1 et seq.; to view a free copy, please click here; the Federal Prompt Payment Statute is codified at 31 U.S.C. § 3901 et. seq.; for a free copy of the United States Code Section, please click here. Additional provisions related to the federal version of the prompt pay act can be found at 48 CFR § 52.232.27; for a free copy of this section, please click here.
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When used effectively, the Georgia Prompt Payment Statute can help construction professionals improve their collection rates, and, as you can see from this information, only an experienced Georgia attorney should undertake a claim to enforce rights under these acts. If you seek a qualified Georgia construction lawyer, please email us or call us at 1-866-960-9539 today!