Prompt Payment: A Requirement, Not an Option

prompt payment a requirementFlorida Statute §255.071 is a little known but potent tool for subcontractors and materialmen. It allows them to seek immediate payment on undisputed contract obligations due on public projects from contractors who have already been paid.

While a contractor may find it preferable for cash flow reasons to simply keep a subcontractor waiting, even after receiving payment for its portion of the work from the municipality or public entity requesting the work, it is neither legal nor smart. Contractors would do well to heed the recent ruling by Florida’s Third District Court of Appeal. The Court made clear that ignoring this statute comes with the penalty of paying accrued interest, attorney’s fees and costs, holding that the subcontractor was “entitled to various immediate remedies” for rapid recovery of the undisputed contract obligations.

Prompt Payment: A Requirement, Not an Option

And it isn’t just on public jobs that subcontractors have this level of protection. Florida Statute §713.346 provides similar guidelines for contractors performing private work.

It States in Pertinent Part:

Any person who receives payment for constructing or altering permanent improvements to real property shall pay, in accordance with the contract terms, the undisputed contract obligations for labor, services or materials provided on account of such improvements.

Ever mindful of the uneven bargaining position in which most subcontractors and materialmen find themselves, the legislature sought to level the playing field. Florida lien law, along with these statutes, are one way of doing so. Follow the payment dollars, some of them may be yours.

Prompt Payment: A Requirement, Not an Option was last modified: February 5th, 2016 by Alexander Barthet

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