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How often is a payment application presented?

ArizonaConstruction ContractPay ApplicationsPrompt Payment

How often is a payment application presented?

1 reply

Oct 2, 2019
Payment applications are really interesting documents in the construction process. In most industries, you simply create an invoice and send it to your customer. The invoice contains terms. And you just send out the invoice whenever you decide to bill for your work.  It's pretty simple. In construction, contractors must deal with pay applications.  These can be really complicated. First, let me give you a very, very short answer to your question. Q: How often is a payment application presented? A:  There is not a formal, set time period Now, though, let me flesh out the answer.  Generally speaking, pay applications are not regulated in any way. There is no law in Arizona or anywhere else that says payment applications must be presented on such and such a date, or in such and such frequency.  The procedure of sending and exchanging pay applications is left completely to the parties. The parties agree with whatever process, procedure, and frequency they want. This is usually governed within the construction contract. The construction contract may proscribe some specific schedule for your pay applications.  If that is the case, the most common schedule is monthly.  It is extremely common for contractors to exchange construction pay applications on a monthly basis.  There is a great explanation of this whole process in the blog post, "Pay Apps: A Simple Overview – Common Forms and Parts." While the pay application process itself is not regulated, payment terms are highly regulated in Arizona, and all across the country.
  • Can the contract require pay when paid or pay if paid conditions?  And if so, what are the limits?
  • How quickly must an owner pay a general contractor after invoicing?
  • How quickly must a general contractor pay a subcontractor after invoicing?
  • How much retainage can a contractor or owner withhold on a project?
  • Etc.
All of this stuff is very regulated.  Click on this link to read about the regulation of payment terms in Arizona.
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