Missouri Prompt Payment Guide and FAQs

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Missouri Prompt Payment Overview

Missouri Prompt Payment Requirements


  • Private Jobs
  • Public Jobs
  • Top Links
YES
Prime Contractors

For Prime(General) Contractors, payment is set by contract. Missouri is interesting in that the prompt pay statute merely says: "you need to pay how the contract tells you"


YES
Subcontractors

For Subcontractors, payment is set by contract. Missouri is interesting in that the prompt pay statute merely says: "you need to pay how the contract tells you"


YES
Suppliers

For Suppliers, payment is set by contract. Missouri is interesting in that the prompt pay statute merely says: "you need to pay how the contract tells you"


1.5%
/ MONTH
Interest & Fees

Interest at 1.5% month *may* be awarded. Attorneys' fees *may* be awarded to prevailing party.

30
DAYS
Prime Contractors

For Prime (General) Contractors, progress payments due within the later of 30 days from invoice or 30 days from receipt of work. Final/retainage payment due within 30 days of completion.


15
DAYS
Subcontractors

For Subcontractors, payment due within 15 days of receipt of payment from above.


15
DAYS
Suppliers

For Suppliers, payment due within 15 days of receipt of payment from above.


1.5%
/ MONTH
Interest & Fees

Interest at 1.5% month; attorney fees *may* be awarded in court's discretion.

Prompt payment laws are a set of rules that regulate the acceptable amount of time in which payments must be made to contractors and subs. This is to ensure that everyone on a construction project is paid in a timely fashion. These statutes provide a framework for the timing of payments to ensure cash flow and working capital.

Projects Covered by Prompt Payment in Missouri

The Missouri prompt payment provisions are split into two sections, covering both private and public projects. These statutes govern the timing of all payments on construction projects, and impose penalties for late payment in the form of interest.

Private Projects

Missouri prompt payment on private construction projects is governed by Mo. Rev. Stat. §431.180. These rules apply to all private projects with the exception of owner-occupied, residential projects that are 4 or fewer units.

Payment Deadlines for Private Projects

The payment deadlines are not specifically regulated by the statute. Instead, the payment terms provided in the contract will determine when both progress and final payments are due.

Penalties for Late Payment on Private Projects

Any late or wrongfully withheld payments may be subject to interest penalties. If so, interest may accrue at a rate of 1.5% per month. Additionally, if the dispute goes to court or arbitration, the prevailing party may be awarded reasonable attorney fees. Both of these penalties will be granted at the discretion of the court.

Public Projects

Payments on public works projects in Missouri are regulated by Mo. Rev. Stat. §34.057. These rules apply to all public construction projects except those contracted by the Missouri transportation department.

Payment Deadlines for Public Projects

Payments from the public entity to the prime contractor must be made within 30 days of either the delivery of services or materials, or the date an invoice is received, whichever is later. Final payments to the prime contractor must be released within 30 days of completion of the project. As for all other payments to subcontractors and suppliers, those must be made within 15 days of the higher-tiered party’s receipt of payment.

Penalties for Late Payment on Public Projects

Payments may be withheld in good faith, for reasonable cause. Barring such cause, any late or wrongfully withheld payments will be subject to interest penalties. Interest will accrue at a rate of 1.5% per month payment is made. Furthermore, if the dispute goes to court or arbitration, the court may, in its discretion, award attorney fees to the prevailing party.

Missouri Prompt Payment Frequently Asked Questions

Missouri Prompt Payment Private Projects FAQs

Do I have to send a letter or file anything to qualify for Prompt Payment Penalties or Remedies in Missouri?

The required timing of payment in Missouri is governed by, and dependent upon, the parties’ contract.

Can I include Prompt Payment Fees in my Missouri Mechanics Liens Claim or Bond Claim?

No. Missouri doesn’t allow miscellaneous amounts to be included on the face of a mechanics lien.

What happens to my Prompt Payment Penalties and Fees if I get paid late? Can I still recover the Prompt Payment Penalty in Missouri?

If a party is not paid timely in accordance with the contract, interest may be awarded at a rate of 1.5% per month from the date the payment was to supposed to have been made.

Are there reasons for which payment may be withheld past the general deadline?

Missouri statutes do not specify the reasons for which payments may be withheld. Acceptable reasons for withholding payment will likely be determined by the contract.

What is the best practice for making a demand to a non-paying party to get Prompt Payment Fees?

Missouri does not specifically identify reasons for which payment may be withheld, so it is likely that the contract between the parties, and case law, will govern the particular reasons payment may be withheld.

Missouri Prompt Payment Public Projects FAQs

Do I have to send a letter or file anything to qualify for Prompt Payment Penalties or Remedies in Missouri?

The Missouri prompt payment act applies pursuant to the timing requirements set forth by the statute. Interest is recoverable if amounts are wrongfully withheld, and attorney fees may be awarded at the court’s discretion.

Can I include Prompt Payment Fees in my Missouri Mechanics Lien Claim or Bond Claim?

No, Missouri law does not allow for the recovery of miscellaneous amounts in a mechanics lien or bond claim.

If I am paid late according to Prompt Payment Statutes, can I obtain interest or other Penalty Payments?

If payment is received late, and none of the valid reasons for late or extended payment apply, the party to be paid is entitled to recover the interest allowed by law. As a practical matter, it may be difficult to recover amounts in excess of the contractually due amount without filing suit. Attorney fees may only be recovered by a prevailing party in an action to recover wrongfully withheld funds.

Are there reasons for which payment may be withheld past the general deadline?

Reasons for withholding payment or final payment shall include, but are not limited to:

  • Liquidated damages;
  • Unsatisfactory job progress;
  • Defective construction work or materials not remedied;
  • Disputed work;
  • Failure to comply with any material provision of the contract;
  • Third party claims filed or reasonable evidence that a claim will be filed;
  • Failure to make timely payments for labor, equipment, or materials;
  • Damage to a contractor, subcontractor, or material supplier;
  • Reasonable evidence that a subcontractor or material supplier cannot be fully compensated under its contract with the contractor for the unpaid balance of the contract sum; or
  • Citation by the enforcing authority for the acts of the contractor or subcontractor which do not comply with any material provision of the contract and which result in a violation of any federal, state, or local law, regulation or ordinance applicable to that project causing additional costs of damages to the owner.

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Missouri Prompt Payment Statutes

Getting informed about prompt payment laws is important. An examination of Missouri’s prompt payment laws, the rules and regulations related to payment timing, is important to know your rights and responsibilities as a party on a construction project. Missouri’s specific laws can be found in: Rev. Mo. Stat. § 431.180 and § 34.057, and are reproduced below.

Prompt Payment Statute on Private Projects

431.80: Contract for Private Design or Construction Work, Scheduled Payments; Action for Failure to Pay, Interest; Arbitration; Application.

1. All persons who enter into a contract for private design or construction work after August 28, 1995, shall make all scheduled payments pursuant to the terms of the contract.

2. Any person who has not been paid in accordance with subsection 1 of this section may bring an action in a court of competent jurisdiction against a person who has failed to pay. The court may in addition to any other award for damages, award interest at the rate of up to one and one-half percent per month from the date payment was due pursuant to the terms of the contract, and reasonable attorney fees, to the prevailing party. If the parties elect to resolve the dispute by arbitration pursuant to section 435.350, the arbitrator may award any remedy that a court is authorized to award hereunder.

3. The provisions of this section shall not apply to contracts for private construction work for the building, improvement, repair or remodeling of owner-occupied residential property of four units or less.

4. For purposes of this section, design or construction work shall include design, construction, alteration, repair or maintenance of any building, roadway or other structure or improvement to real property, or demolition or* excavation connected therewith, and shall include the furnishing of surveying, architectural, engineering or landscape design, planning or management services, labor or materials, in connection with such work.

Prompt Payment Statute on Public Projects

35.057: Public Works Contracts; Prompt Payment by Public Owner to Contractor, Engineer, Architect, or Surveyor; Prompt Payment by Contractor to Subcontractor; Progress Payments; Retainage; Late Payment Charges; Withholding of Payments.

1. Unless contrary to any federal funding requirements or unless funds from a state grant are not timely received by the contracting public municipality but notwithstanding any other law to the contrary, all public works contracts made and awarded by the appropriate officer, board or agency of the state or of a political subdivision of the state or of any district therein, including any municipality, county and any board referred to as the public owner, for construction, reconstruction or alteration of any public works project, shall provide for prompt payment by the public owner to the contractor, and any professional engineer, architect, landscape architect, or land surveyor, as well as prompt payment by the contractor to the subcontractor and material supplier in accordance with the following:

(1) A public owner shall make progress payments to the contractor and any professional engineer, architect, landscape architect, or land surveyor on at least a monthly basis as the work progresses, or, on a lump sum basis according to the terms of the lump sum contract. Except in the case of lump sum contracts, payments shall be based upon estimates prepared at least monthly of work performed and material delivered, as determined by the project architect or engineer. Retainage withheld on any construction contract or subcontract for public works projects shall not exceed five percent of the value of the contract or subcontract. If the contractor is not required to obtain a bond under section 107.170because the cost of the public works contract is not estimated to exceed fifty thousand dollars, the public owner may withhold retainage on the public works project in an amount not to exceed ten percent of the value of the contract or subcontract. The public owner shall pay the contractor the amount due, less a retainage, within thirty days following the latter of the following:

(a) The date of delivery of materials or construction services purchased;

(b) The date, as designated by the public owner, upon which the invoice is duly delivered to the person or place designated by the public owner; or

(c) In those instances in which the contractor approves the public owner’s estimate, the date upon which such notice of approval is duly delivered to the person or place designated by the public owner;

(2) Payments shall be considered received within the context of this section when they are duly posted with the United States Postal Service or other agreed upon delivery service or when they are hand-delivered to an authorized person or place as agreed to by the contracting parties;

(3) If, in the discretion of the owner and the project architect or engineer and the contractor, it is determined that a subcontractor’s performance has been completed and the subcontractor can be released prior to substantial completion of the public works contract without risk to the public owner, the contractor shall request such adjustment in retainage, if any, from the public owner as necessary to enable the contractor to pay the subcontractor in full. The public owner may reduce or eliminate retainage on any contract payment if, in the public owner’s opinion, the work is proceeding satisfactorily. If retainage is released and there are any remaining minor items to be completed, an amount equal to one hundred fifty percent of the value of each item as determined by the public owner’s duly authorized representatives shall be withheld until such item or items are completed;

(4) The public owner shall pay at least ninety-eight percent of the retainage, less any offsets or deductions authorized in the contract or otherwise authorized by law, to the contractor. The contractor shall pay the subcontractor or supplier after substantial completion of the contract work and acceptance by the public owner’s authorized contract representative, or as may otherwise be provided by the contract specifications for state highway, road or bridge projects administered by the state highways and transportation commission. Such payment shall be made within thirty days after acceptance, and the invoice and all other appropriate documentation and certifications in complete and acceptable form are provided, as may be required by the contract documents. If the public owner or the owner’s representative determines the work is not substantially completed and accepted, then the owner or the owner’s representative shall provide a written explanation of why the work is not considered substantially completed and accepted within fourteen calendar days to the contractor, who shall then provide such notice to the subcontractor or suppliers responsible for such work. If such written explanation is not given by the public body, the public body shall pay at least ninety-eight percent of the retainage within thirty calendar days. If at that time there are any remaining minor items to be completed, an amount equal to one hundred fifty percent of the value of each item as determined by the public owner’s representative shall be withheld until such items are completed;

(5) All estimates or invoices for supplies and services purchased, approved and processed, or final payments, shall be paid promptly and shall be subject to late payment charges provided in this section. Except as provided in subsection 4 of this section, if the contractor has not been paid within thirty days as set forth in subdivision (1) of subsection 1 of this section, the contracting agency shall pay the contractor, in addition to the payment due him, interest at the rate of one and one-half percent per month calculated from the expiration of the thirty-day period until fully paid;

(6) When a contractor receives any payment, the contractor shall pay each subcontractor and material supplier in proportion to the work completed by each subcontractor and material supplier his application less any retention not to exceed five percent. If the contractor receives less than the full payment due under the public construction contract, the contractor shall be obligated to disburse on a pro rata basis those funds received, with the contractor, subcontractors and material suppliers each receiving a prorated portion based on the amount of payment. When, however, the public owner does not release the full payment due under the contract because there are specific areas of work or materials he is rejecting or because he has otherwise determined such areas are not suitable for payment then those specific subcontractors or suppliers involved shall not be paid for that portion of the work rejected or deemed not suitable for payment; provided the public owner or the owner’s representative gives a written explanation to the contractor, subcontractor, or supplier involved as to why the work or supplies were rejected or deemed not suitable for payment, and all other subcontractors and suppliers shall be paid in full;

(7) If the contractor, without reasonable cause, fails to make any payment to his subcontractors and material suppliers within fifteen days after receipt of payment under the public construction contract, the contractor shall pay to his subcontractors and material suppliers, in addition to the payment due them, interest in the amount of one and one-half percent per month, calculated from the expiration of the fifteen-day period until fully paid. This subdivision shall also apply to any payments made by subcontractors and material suppliers to their subcontractors and material suppliers and to all payments made to lower tier subcontractors and material suppliers throughout the contracting chain;

(8) The public owner shall make final payment of all moneys owed to the contractor, including any retainage withheld under subdivision (4) of this subsection, less any offsets or deductions authorized in the contract or otherwise authorized by law, within thirty days of the due date. Final payment shall be considered due upon the earliest of the following events:

(a) Completion of the project and filing with the owner of all required documentation and certifications, in complete and acceptable form, in accordance with the terms and conditions of the contract;

(b) The project is certified by the architect or engineer authorized to make such certification on behalf of the owner as having been completed, including the filing of all documentation and certifications required by the contract, in complete and acceptable form; or

(c) The project is certified by the contracting authority as having been completed, including the filing of all documentation and certifications required by the contract, in complete and acceptable form.

2. Nothing in this section shall prevent the contractor or subcontractor, at the time of application or certification to the public owner or contractor, from withholding such applications or certifications to the owner or contractor for payment to the subcontractor or material supplier. Amounts intended to be withheld shall not be included in such applications or certifications to the public owner or contractor. Reasons for withholding such applications or certifications shall include, but not be limited to, the following: unsatisfactory job progress; defective construction work or material not remedied; disputed work; failure to comply with other material provisions of the contract; third-party claims filed or reasonable evidence that a claim will be filed; failure of the subcontractor to make timely payments for labor, equipment and materials; damage to a contractor or another subcontractor or material supplier; reasonable evidence that the contract cannot be completed for the unpaid balance of the subcontract sum or a reasonable amount for retention, not to exceed the initial percentage retained by the owner.

3. Should the contractor determine, after application or certification has been made and after payment has been received from the public owner, or after payment has been received by a contractor based upon the public owner’s estimate of materials in place and work performed as provided by contract, that all or a portion of the moneys needs to be withheld from a specific subcontractor or material supplier for any of the reasons enumerated in this section, and such moneys are withheld from such subcontractor or material supplier, then such undistributed amounts shall be specifically identified in writing and deducted from the next application or certification made to the public owner or from the next estimate by the public owner of payment due the contractor, until a resolution of the matter has been achieved. Disputes shall be resolved in accordance with the terms of the contract documents. Upon such resolution the amounts withheld by the contractor from the subcontractor or material supplier shall be included in the next application or certification made to the public owner or the next estimate by the public owner and shall be paid promptly in accordance with the provisions of this section. This subsection shall also apply to applications or certifications made by subcontractors or material suppliers to the contractor and throughout the various tiers of the contracting chain.

4. The contracts which provide for payments to the contractor based upon the public owner’s estimate of materials in place and work performed rather than applications or certifications submitted by the contractor, the public owner shall pay the contractor within thirty days following the date upon which the estimate is required by contract to be completed by the public owner, the amount due less a retainage not to exceed five percent. All such estimates by the public owner shall be paid promptly and shall be subject to late payment charges as provided in this subsection. After the thirtieth day following the date upon which the estimate is required by contract to be completed by the public owner, the contracting agency shall pay the contractor, in addition to the payment due him, interest at a rate of one and one-half percent per month calculated from the expiration of the thirty-day period until fully paid.

5. The public owner shall pay or cause to be paid to any professional engineer, architect, landscape architect, or land surveyor the amount due within thirty days following the receipt of an invoice prepared and submitted in accordance with the contract terms. In addition to the payment due, the contracting agency shall pay interest at the rate of one and one-half percent per month calculated from the expiration of the thirty-day period until fully paid.

6. Nothing in this section shall prevent the owner from withholding payment or final payment from the contractor, or a subcontractor or material supplier. Reasons for withholding payment or final payment shall include, but not be limited to, the following: liquidated damages; unsatisfactory job progress; defective construction work or material not remedied; disputed work; failure to comply with any material provision of the contract; third party claims filed or reasonable evidence that a claim will be filed; failure to make timely payments for labor, equipment or materials; damage to a contractor, subcontractor or material supplier; reasonable evidence that a subcontractor or material supplier cannot be fully compensated under its contract with the contractor for the unpaid balance of the contract sum; or citation by the enforcing authority for acts of the contractor or subcontractor which do not comply with any material provision of the contract and which result in a violation of any federal, state or local law, regulation or ordinance applicable to that project causing additional costs or damages to the owner.

7. Nothing in this section shall be construed to require direct payment by a public owner to a subcontractor or supplier, except in the case of the default, as determined by a court, of the contractor on the contract with the public owner where no performance or payment bond is required or where the surety fails to execute its duties, as determined by a court.

8. Notwithstanding any other provisions in this section to the contrary, no late payment interest shall be due and owing for payments which are withheld in good faith for reasonable cause pursuant to subsections 2, 5, and 6 of this section. If it is determined by a court of competent jurisdiction that a payment which was withheld pursuant to subsections 2, 5, and 6 of this section was not withheld in good faith for reasonable cause, the court may impose interest at the rate of one and one-half percent per month calculated from the date of the invoice and may, in its discretion, award reasonable attorney fees to the prevailing party. In any civil action or part of a civil action brought pursuant to this section, if a court determines after a hearing for such purpose that the cause was initiated, or a defense was asserted, or a motion was filed, or any proceeding therein was done frivolously and in bad faith, the court shall require the party who initiated such cause, asserted such defense, filed such motion, or caused such proceeding to be had to pay the other party named in such action the amount of the costs attributable thereto and reasonable expenses incurred by such party, including reasonable attorney fees.

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