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§ 507. Contractor's and subcontractor's payment obligations

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 73 P.S. Trade and CommerceEffective: October 10, 2018

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 73 P.S. Trade and Commerce (Refs & Annos)
Chapter 14A. Contractor and Subcontractor Payment Act (Refs & Annos)
Effective: October 10, 2018
73 P.S. § 507
§ 507. Contractor's and subcontractor's payment obligations
Currentness
(a) Entitlement to payment.--Performance by a subcontractor in accordance with the provisions of the construction contract shall entitle the subcontractor to payment from the party with whom the subcontractor has contracted.
(b) Disclosure of payment dates.--A contractor or subcontractor shall disclose to a subcontractor, before a subcontract is executed, the due date for receipt of payments from the owner. Notwithstanding any other provision of this act, if a contractor or subcontractor fails to accurately disclose the due date to a subcontractor, the contractor or subcontractor shall be obligated to pay the subcontractor as though the due dates established in section 5(c)1 were met by the owner. This subsection shall not apply to a change in due dates because of conditions outside of the contractor's control, including, but not limited to, design changes, change orders or delays in construction due to weather conditions.
(c) Time for payment.--When a subcontractor has performed in accordance with the provisions of the construction contract, a contractor shall pay to the subcontractor, and each subcontractor shall in turn pay to the subcontractor's subcontractors, the full or proportional amount received for each such subcontractor's work and materials, based on work completed or service provided under the subcontract, 14 days after receipt of each progress or final payment or 14 days after receipt of the subcontractor's invoice, whichever is later. Payment shall be made under this section unless it is being withheld under section 11.2
(d) Interest.--If any progress or final payment to a subcontractor is delayed beyond the date established in subsection (b) or (c), the contractor or subcontractor shall pay the subcontractor interest, beginning on the next day, at the rate provided for in section 5(d)3 on the balance that is at the time due and owing.
(e) Suspension of performance.--
(1) If payment is not received by a subcontractor in accordance with this section, the subcontractor shall have the right to suspend performance of any work, without penalty, until payment is received according to the terms of the construction contract. Any procedure in a construction contract that exceeds the procedure in paragraph (2) shall be unenforceable.
(2) Suspension of performance in a construction contract may occur in accordance with paragraph (1) or if:
(i) payment has not been made to the subcontractor in accordance with the schedule established under subsection (c);
(ii) at least 30 calendar days have passed since the end of the billing period for which payment has not been received according to the terms of the construction contract. The subcontractor shall provide written notice to the contractor or contractor's authorized agent, via electronic mail or postal service, stating that payment has not been made; and
(iii) at least 30 calendar days have passed since the written notice in subparagraph (ii) has been sent. The subcontractor shall provide at least 10 calendar days' written notice, via certified mail, of the subcontractor's intent to suspend performance to the owner or the owner's authorized agent.

Credits

1994, Feb. 17, P.L. 73, No. 7, § 7, effective in 60 days. Amended 2018, June 12, P.L. 131, No. 27, § 3, effective in 120 days [Oct. 10, 2018].

Footnotes

1
73 P.S. § 505(c).
2
73 P.S. § 511.
3
73 P.S. § 505(d).
73 P.S. § 507, PA ST 73 P.S. § 507
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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