Private Prompt Payment Laws by State: Payment Deadlines and Interest on Private Construction Projects (2026)
✓ Verified against state statutes · Reviewed November 2026 · By Michael Evan — Founder · 50 states · 799 rules
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Key Takeaways
A mechanical subcontractor on a private distribution center in Texas bills $142,000 for September. The owner pays the GC on October 20. The GC pays the sub on December 18 — 59 days later — and calls it normal. It is not. Texas Property Code chapter 28 gave the GC 7 days. Every day after that, the unpaid amount earned 1.5 percent a month. Most contractors know that public jobs come with prompt payment rules. Far fewer know that many states set deadlines and interest on private jobs too, at every tier, and that some of those statutes override what the subcontract says. This guide covers the 17 private or general prompt payment statutes we checked against primary text. It is a companion to our public prompt payment laws by state hub and to Pay-If-Paid vs Pay-When-Paid Clauses by State , which covers the subcontract clauses that GCs use to delay payment.
What Is a Private Prompt Payment Law?
Owner to prime contractor: a deadline measured from a payment request, an invoice, or approval of a pay application. Several states treat a pay application as approved if the owner doesn’t object in writing within a set time. Prime to subcontractor (and down the chain): a deadline measured from the day the paying party receives its own payment. A private prompt payment law is a state statute that sets a deadline for payment on a privately owned construction project and charges interest or a penalty when it is missed. Most do two things: Withholding is usually allowed only for a good-faith dispute, and often only for the disputed amount. Some statutes cap it: California limits withholding to 150 percent of the disputed amount.
Private Prompt Payment Laws: 17-State Table
Florida appears once in the table but has two statutes: § 715.12 for interest and § 713.346 for court remedies. Georgia, Pennsylvania, and Tennessee also have private prompt pay acts that we have not yet verified against primary text, so they are left out until we have. Other states have not been reviewed. A state missing from this table is not proof it has no statute. Arizona (A.R.S. §§ 32-1182, 32-1183) — owner to prime: 7 days after certification (deemed certified at 14 days); prime to sub: 7 days after receipt; interest: 1.5%/month or higher agreed rate. Periods extend only with a conspicuous notice on every page of the plans. Subs not responsible for a withheld defect are paid within 21 days. California (Civ. Code §§ 8800, 8812, 8814; B&P § 7108.5) — owner to prime: 30 days after demand; retention 45 days after completion; prime to sub: 7 days after each progress payment; retention 10 days after receipt; interest: 2%/month penalty. Deadlines can be changed by written agreement. Withholding capped at 150% of the disputed amount. § 7108.5 awards the prevailing party attorney fees. Connecticut (Conn. Gen. Stat. § 42-158j) — owner to prime: 30 days after written request; prime to sub: 25 days after receipt; interest: 1%/month. Claim must go by registered or certified mail; liability attaches 10 days after receipt of the notice. Florida (Fla. Stat. §§ 715.12, 713.346) — owner to prime: Contract terms; final payment and retainage 14 days after substantial completion and punchlist; prime to sub: Due once the obligor is paid; interest: Judgment rate + 12%/yr, from 14 days after due. § 713.346: undisputed amounts unpaid 30 days unlock an accounting, injunction, and attachment, with prevailing-party fees. Illinois (815 ILCS 603/5, /10, /15) — owner to prime: 15 days after approval (deemed approved at 25 days); prime to sub: 15 days after receipt; interest: 10%/yr. Excludes public-funded contracts, single-family homes, and multifamily of 12 or fewer units. Sub may suspend after 7 days' written notice. Kansas (K.S.A. § 16-1803) — owner to prime: 30 days after a proper, undisputed request; prime to sub: 7 business days after receipt; interest: 18%/yr. Expressly covers private construction; applies at every tier. Maryland (Md. Real Prop. § 9-302) — owner to prime: 7 days after the contract payment date; if none, 30 days after occupancy permit or possession; prime to sub: 7 days after receipt (undisputed amounts); interest: Not set in § 9-302. Owner rule excludes public owners. Massachusetts (M.G.L. c. 149 § 29E) — owner to prime: Contract may allow no more than 45 days to pay after approval; prime to sub: Same caps (plus 7 days per lower tier for approval); interest: None in statute. Only where the owner-level contract is $3M or more; excludes 1–4 dwelling units. Silence counts as approval. Minnesota (Minn. Stat. § 337.10) — owner to prime: Monthly progress payments unless agreed; retainage within 60 days of substantial completion; prime to sub: 10 days after receipt; interest: 1.5%/month ($10 minimum). Retainage must also be passed down within 10 days. New Jersey (N.J.S.A. 2A:30A-2) — owner to prime: 30 days after billing (deemed approved at 20 days); prime to sub: 10 days after receipt unless agreed in writing; interest: Prime rate + 1%. Prevailing party recovers attorney fees; suit must be filed in New Jersey. New York (Gen. Bus. Law §§ 756–757) — owner to prime: 12 business days to approve, then 30 days to pay; prime to sub: 7 days after receipt of good funds; interest: 1%/month or higher contract rate. Projects of $150,000+; excludes public works and most smaller residential. Contrary contract terms are void. Retainage capped at 5%. North Carolina (N.C.G.S. §§ 22C-2, 22C-5) — owner to prime: No statutory deadline; prime to sub: Interest if more than 7 days late after receipt; interest: 1%/month from day 8. Pay-if-paid clauses are unenforceable (§ 22C-2). Ohio (Ohio Rev. Code § 4113.61) — owner to prime: No statutory deadline; prime to sub: 10 calendar days after receipt; interest: 18%/yr from day 11. Excludes 1–3 family detached homes. Interest and attorney-fee rights can't be waived. South Carolina (S.C. Code §§ 29-6-30, 29-6-50) — owner to prime: 21 days after pay request (undisputed); prime to sub: 7 days after receipt; interest: 1%/month if the payer was told of the statute. Private parties can contract out with a waiver naming the sections in bold or underlined type. Texas (Tex. Prop. Code §§ 28.002, 28.004) — owner to prime: 35 days after written payment request; prime to sub: 7 days after receipt (same for lower tiers); interest: 1.5%/month from the day after due. Check chapter 28's definitions for scope and exclusions. Virginia (Va. Code § 11-4.6) — owner to prime: 60 days after invoice; 45-day notice of withholding; prime to sub: Earlier of 60 days after invoice or 7 days after the prime is paid; interest: Tied to § 2.2-4355. Private owners only. Pay-if-paid unenforceable unless the owner is insolvent or bankrupt. Flow-down on non-single-family contracts over $500K.
The Big Markets in Detail
Under Tex. Prop. Code § 28.002, the owner pays within 35 days of a written payment request, and a contractor pays its subcontractor within 7 days of receiving payment. The same 7-day rule applies to each lower tier. Unpaid amounts earn 1.5 percent a month from the day after they are due (§ 28.004). Texas subs should still serve the monthly fund-trapping notices; see our Texas monthly notice guide . Civ. Code § 8800 requires an owner to pay a direct contractor within 30 days of a payment demand. Bus. & Prof. Code § 7108.5 requires a prime to pay subs within 7 days of each progress payment, on private and public work, and awards attorney fees to the prevailing party. Both carry a 2 percent monthly penalty. Retention is due 45 days after completion from the owner and 10 days after receipt down the chain (§§ 8812, 8814). The deadlines can be changed by written agreement, so read the contract. Gen. Bus. Law §§ 756–757 give the owner 12 business days to approve an invoice and 30 days to pay, and give the prime 7 days after it receives good funds to pay the sub. Interest is 1 percent a month or a higher contract rate. The law excludes public works and most smaller residential projects, caps retainage at 5 percent, and voids contract payment terms that conflict with it. 815 ILCS 603 gives the owner 15 days after approval to pay, and a pay application is deemed approved at 25 days…
How to Use a Prompt Payment Statute to Get Paid
Protect the lien first. Calculate your recording deadline with the Mechanics Lien Management State System. The prompt payment claim does not extend it. Find out when the party above you was paid. The flow-down clock usually runs from that date. Ask in writing. Compute the interest. Balance × monthly rate × months late. Put the number in your demand. Follow the statute’s notice rules. Connecticut requires a certified-mail claim, and South Carolina’s interest depends on the payer being told about the statute. Cite the statute in a dated demand. Our demand letter template has a slot for it. Escalate on schedule. If the date passes, record the lien with the lien generator, or stop work where the statute allows it. For the full escalation path, see Contractor Won’t Pay Me? 9 Steps to Get Paid . Retainage has its own release rules; see Retainage Laws by State .
Common Mistakes
Interest is a claim; the lien is security. Miss the deadline and you lose your lien rights entirely. New York starts at $150,000, Massachusetts at $3 million, and Illinois and Ohio exclude smaller residential work. Check scope first. California and South Carolina allow contract changes in some circumstances. Ohio and New York push back. Read both documents. Where a statute ties interest to a notice or a certified-mail claim, an email asking “where’s my check” may not start the clock.
Late Payment? Lock In the Lien, Then Claim the Interest
The Mechanics Lien Management State System calculates your notice, lien, and enforcement dates in all 50 states. Build the filing in the lien generator, or connect with a licensed construction attorney through the Mechanics Lien Management attorney network to pursue a prompt payment claim.
Frequently Asked Questions
Do prompt payment laws apply to private construction projects?
In many states, yes. Every state but New Hampshire has a public-project prompt payment statute, but private-project rules are a separate and smaller group. We verified private or general prompt payment statutes in 17 states, including Texas (Prop. Code ch. 28), California (Civ. Code 8800 and B&P 7108.5), New York (Gen. Bus. Law art. 35-E), Illinois (815 ILCS 603), New Jersey (2A:30A-2), Arizona (32-1182 and 32-1183), and Ohio (4113.61). Each has its own deadlines, interest rate, and exclusions.
How long does a general contractor have to pay a subcontractor after being paid?
On private work it depends on the state. Seven days after receipt is the most common rule: Texas, California, New York, Arizona, South Carolina, Maryland, and Kansas (7 business days) use it. Minnesota, New Jersey, and Ohio use 10 days, Illinois uses 15, and Connecticut uses 25. Virginia uses the earlier of 60 days after the invoice or 7 days after the prime is paid. North Carolina starts interest if payment is more than 7 days late.
What interest can I charge on a late construction payment?
The statutory rate varies by state. California charges a 2 percent per month penalty, Texas, Arizona, and Minnesota 1.5 percent per month, New York, North Carolina, South Carolina, and Connecticut 1 percent per month, Ohio and Kansas 18 percent a year, Illinois 10 percent a year, and New Jersey the prime rate plus 1 percent. Some states add conditions, such as South Carolina requiring that the payer was told about the statute, and Connecticut requiring a certified-mail claim.
Can a contract waive the prompt payment act?
Sometimes. California lets the parties change the owner and subcontractor deadlines by written agreement, and South Carolina lets private parties contract out if the waiver names the statute in bold or underlined type. Other states protect the statute: Ohio makes the right to interest and attorney fees non-waivable, and New York voids contract payment terms that differ from the statute. Read the statute and the contract together.
Does the Texas Prompt Pay Act apply to private projects?
Texas Property Code chapter 28 sets payment deadlines for construction contracts without limiting itself to public work: the owner pays within 35 days of a written payment request, and the contractor pays a subcontractor within 7 days of receiving payment, with the same rule for lower tiers. Unpaid amounts earn interest at 1.5 percent a month starting the day after payment is due (Tex. Prop. Code 28.002, 28.004). Check the chapter's definitions and exclusions for your project.
Is a prompt payment claim a substitute for a mechanics lien?
No. A prompt payment statute gives you a deadline and an interest claim against the party that owes you. A mechanics lien gives you security against the property itself, and it has its own notice, recording, and enforcement deadlines that run whether or not you pursue prompt payment interest. Most unpaid claimants should calculate the lien deadline first and use the prompt payment statute as leverage in the demand.
Which states have private prompt payment laws?
We verified private or general prompt payment statutes against primary text in Arizona, California, Connecticut, Florida, Illinois, Kansas, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Ohio, South Carolina, Texas, and Virginia. Georgia, Pennsylvania, and Tennessee also have private prompt pay acts that we have not yet verified for this guide. Several other states have not yet been reviewed, so a state missing from our table is not proof it has no statute.