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ARTICLE · 25 MARCH 2024

It Doesn't Pay To Delay: Prompt Payment Acts In Texas

Gray Reed
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If an owner or general contractor fails to timely pay on a project, you may be entitled to prompt pay interest. Prompt payment acts are intended to deter late payments...

United StatesFinance and Banking
Patrick A. Kelly
Patrick A. Kelly
Graham P. Quinn
Graham P. Quinn
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If an owner or general contractor fails to timely pay on a project, you may be entitled to prompt pay interest. Prompt payment acts are intended to deter late payments by general contractors and owners by enabling contractors and suppliers to pursue additional remedies including penalty interest, attorneys' fees and suspension of performance.

Texas Private Prompt Payment Act

Chapter 28 of the Texas Property Code, commonly known as the Prompt Payment Act, requires the owner of a private project to pay the general contractor within 35 days of an invoice being submitted. The general contractor, in turn, must pay subcontractors within 7 days of receiving payment from the owner. The same deadline is imposed on first-tier subcontractors making payments to second-tier subcontractors.

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