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How long does it take for a pay application to be paid by an owner?

How long does it typically take for a pay application to be processed by the owner, then for payment to be delivered back to the contractor? I am working on a project for class and my specs do not specify a pay application return period. What is the industry standard for a project of $2.5M?

1 reply

Apr 14, 2020

Generally, pay apps should be paid in accordance with Georgia's prompt payment laws. Under Georgia Code 13-11-4, progress payments on private jobs should be made within 15 days of when the owner (or their agent) received the payment request. Though, if there are issues with the work (like the ones listed below) then the owner will be authorized to withhold payments. List of reasons for withholding: - unsatisfactory job progress; - defective construction which has not been remedied; - disputed work; - third-party claims filed or reasonable evidence that a claim will be filed; - failure of the contractor or its subcontractor to make timely payments for labor, equipment, and materials; - damage caused by the contractor to the owner, other contractors, or subcontractors; - reasonable evidence that the contract cannot be completed for the unpaid balance of the contract sum With that being said, it'd hardly be surprising to hear that parties on a large Georgia construction project would agree to an extended timeframe there. And, payment within 15 days of billing is pretty quick. Since I don't have practical experience with that sort of thing in Georgia, I'm afraid I won't be able to shed light on what kind of turnaround should be expected or acceptable there or if it's usual for participants to disregard these laws. But, you can always reach out to one of these Georgia construction attorneys for more info. But, while an owner and contractor can opt-out of prompt payment laws in some states, it doesn't look like Georgia provides that option. So, if you feel that your customer is paying too slowly, you might be able to leverage the interest penalties under the Georgia prompt payment laws into faster payment.

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