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Construction law

prompt payment statutes

Prompt payment statutes are laws that require the payment of contractors and subcontractors within a certain period of time, and prescribe interest and penalties for late payments. In some states these laws only apply to public works construction projects that are funded by the government—and sometimes only to public works projects over a certain dollar amount. There is also a federal Prompt Payment Act for federal construction projects.

In Colorado, prompt payment statutes are designed to ensure that contractors and subcontractors are paid in a timely manner for their work on construction projects. Under Colorado Revised Statutes Title 24, Article 91, the state has established specific time frames for when payments must be made on public projects. For instance, once a contractor submits a proper invoice, the public entity must pay the contractor within 45 days. Subcontractors must then be paid by the contractor within seven days of the contractor receiving payment. If payments are not made within these time frames, interest penalties may apply. The interest rate is set by statute and is subject to change. It's important to note that these regulations primarily apply to public construction projects, not private ones. For federal construction projects, the Federal Prompt Payment Act applies, which similarly requires timely payment to contractors and subcontractors, with its own set of deadlines and penalties for late payment.

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Construction law

prompt payment statutes

As a LegalFix Member You Will Be an Important Client of Local Law Firms

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Colorado State Code

Colorado State Code

Construction law

prompt payment statutes

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