New Mexico Prompt Payment Guide and FAQs

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New Mexico Prompt Payment Overview

New Mexico Prompt Payment Requirements


21
DAYS
Prime Contractors

For Prime Contractors, progress payment must be made within 21 days of invoice. Final payment due within 10 days of certification of project completion.


7
DAYS
Subcontractors

For Subcontractors, payment due within 7 days of payment received from above.


7
DAYS
Suppliers

For Suppliers, payment due within 7 days of payment received from above.


1.5%
/ MONTH
Interest & Fees

Interest at 1.5% month. Court *may* award attorneys' fees.

21
DAYS
Prime Contractors

For Prime (General) Contractors, progress payments due within 21 days of invoice. Final payment due within 10 days of certification of project completion.


7
DAYS
Subcontractors

For Subcontractors, payment due within 7 days of payment received from above.


7
DAYS
Suppliers

For Suppliers, payment due within 7 days of payment received from above.


1.5%
/ MONTH
Interest & Fees

Interest at 1.5% month. Court *may* award attorneys' fees.

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 New Mexico

The state of New Mexico’s prompt payment provisions cover both private and public projects. The regulations can be found in N.M. Stat. §§57-28-1 et seq. These statutes govern the timing of all payments on construction projects, and impose penalties for late payment in the form of interest. The rules found in these statutes apply to all construction projects except residential projects containing 4 or fewer units.

Payment Deadlines

Progress payments from the owner or public entity to the prime contractor must be made within 21 days of receipt of a proper request for payment. As for final payments to the prime, payment should be released within 10 days of the certification of the project’s completion. If the owner receives an improper invoice, they must notify the contractor within 7 days of receipt. All other payments down the payment chain must be made within 7 days when the higher-tiered party received payment.

Penalties for Late Payment

Any late or wrongfully withheld payments will be subject to an interest penalty which begins to accrue on the day payment is late. Interest will accrue at a rate of 1.5% per month until the balance is paid. Furthermore, in an action to enforce these provisions, the court may award costs and attorney fees to the prevailing party.

New Mexico Prompt Payment Frequently Asked Questions

New Mexico Prompt Payment Private Projects FAQs

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

In order for the provisions of the New Mexico prompt pay act to apply, an undisputed request for payment must be submitted. If an improper invoice or payment request is given, the party submitting the invoice must be notified within 7 days of the error, but there is no obligation to pay until the invoice is resubmitted as complete. An award of attorneys’ fees requires an action to enforce the provisions of the prompt pay act.

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New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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Can I include Prompt Payment Fees in my New Mexico Mechanics Liens Claim or Bond Claim?

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

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New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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If I am paid late according to prompt payment statutes, can I obtain interest or other penalty payments?

Interest begins to accrue in New Mexico immediately upon the day after which payment was due. Interest accrues at a rate of 1.5% of the undisputed amount per month (or part month).

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New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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Are there reasons for which payment may be withheld past the general deadline?

New Mexico statutes don’t specifically set forth reasons for which payment may be withheld, and so specific reasons will likely be determined by contract.

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New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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What is the best practice for making a demand to a non-paying party to get prompt payment fees?

Sending a notice of intent to lien and prompt payment demand is generally the best method for encouraging parties to make payment.

Summary
New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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New Mexico Prompt Payment Public Projects FAQs

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

In order for the provisions of the New Mexico prompt pay act to apply, an undisputed request for payment must be submitted. If an improper invoice or payment request is given, the party submitting the invoice must be notified within 7 days of the error, but there is no obligation to pay until the invoice is resubmitted as complete. An award of attorneys’ fees requires an action to enforce the provisions of the prompt pay act.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Can I include Prompt Payment Fees in my New Mexico Mechanics Liens Claim or Bond Claim?

No. New Mexico law does not allow for the recovery of miscellaneous amounts in a bond claim.

Summary
New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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If I am paid late according to prompt payment statutes, can I obtain interest or other penalty payments?

Interest begins to accrue in New Mexico immediately upon the day after which payment was due. Interest accrues at a rate of 1.5% of the undisputed amount per month (or part month).

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Are there reasons for which payment may be withheld past the general deadline?

New Mexico statutes don’t specifically set forth reasons for which payment may be withheld, and so specific reasons will likely be determined by contract.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Levelset
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retainage vs prompt payment

What if State Law allows 5% Retainage. Do Prompt Payment Requirements negate the Developer or GC from holding Retainage? Retainage Act provisions says "A. Except as provided in Subsection B of this section, all construction contracts shall provide that payment for amounts due, except for...

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New Mexico Prompt Payment Statutes

Getting informed about prompt payment laws is important. An examination of New Mexico’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. New Mexico’s specific laws can be found in: N.M. Stat., §§ 57-28-1 – 57-28-11, and are reproduced below.

Prompt Payment Statute on Private Projects

57-28-1: Short Title

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
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57-28-2: Definitions

As used in the Prompt Payment Act:

A. “construction” means building, altering, repairing, installing or demolishing in the ordinary course of business any:

(1) road, highway, bridge, parking area or related project;

(2) building, stadium or other structure;

(3) airport, subway or similar facility;

(4) park, trail, athletic field, golf course or similar facility;

(5) dam, reservoir, canal, ditch or similar facility;

(6) sewage or water treatment facility, power generating plant, pump station, natural gas compression station or similar facility;

(7) sewage, water, gas or other pipeline;

(8) transmission line;

(9) radio, television or other tower;

(10) water, oil or other storage tank;

(11) shaft, tunnel or other mining appurtenance;

(12) electrical wiring, plumbing or plumbing fixture, gas piping, gas appliances or water conditions;

(13) air conditioning conduit, heating or other similar mechanical work;

(14) leveling or clearing land;

(15) excavating earth;

(16) drilling wells of any type, including seismographic shot holes or core drilling; and

(17) similar work, structures or installations;

B. “contractor” means a person performing construction through a contract with an owner;

C. “owner” means a person, local public body or state agency other than the department of transportation;

D. “person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or similar legal entity; and

E. “subcontractor” means a person performing construction for the owner not through a contract with the owner.

Summary
New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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57-28-3: Applicability of Act

The provisions of the Prompt Payment Act do not apply to construction contracts for residential property containing four or fewer dwelling units.

Summary
New Mexico Prompt Payment Law
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New Mexico Prompt Payment Law
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57-28-4: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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57-28-5: Payments; Prompt Pay Required; Withholding Prohibited

A. Except as provided in Subsection B of this section, all construction contracts shall provide that payment for amounts due shall be paid within twenty-one days after the owner receives an undisputed request for payment. Payment by the owner to the contractor may be made by first-class mailing, electronic funds transfer or by hand delivery of the undisputed amount of a pay request based on work completed or service provided under the contact. If the owner fails to pay the contractor within twenty-one days after receipt of an undisputed request for payment, the owner shall pay interest to the contractor beginning on the twenty-second day after payment was due, computed at one and one-half percent of the undisputed amount per month or fraction of a month until the payment is issued. If an owner receives an improperly completed invoice, the owner shall notify the sender of the invoice within seven days of receipt in what way the invoice is improperly completed, and the owner has no further duty to pay on the improperly completed invoice until it is resubmitted as complete.

B. A local public body may make payment within forty-five days after submission of an undisputed request for payment when grant money is a source of funding, if:

(1) the construction contract specifically provides in a clear and conspicuous manner for a payment later than twenty-one days after submission of an undisputed request for payment; and

(2) the following legend or substantially similar language setting forth the specified number of days appears in clear and conspicuous type on each page of the plans, including bid plans and construction plans: “Notice of Extended Payment Provision

This contract allows the owner to make payment within ____________ days after submission of an undisputed request for payment.”.

C. All construction contracts shall provide that contractors and subcontractors make prompt payment to their subcontractors and suppliers for amounts owed for work performed on the construction project within seven days after receipt of payment from the owner, contractor or subcontractor. If the contractor or subcontractor fails to pay the contractor’s or subcontractor’s subcontractor and suppliers by first-class mail or hand delivery within seven days of receipt of payment, the contractor or subcontractor shall pay interest to the subcontractors and suppliers beginning on the eighth day after payment was due, computed at one and one-half percent of the undisputed amount per month or fraction of a month until payment is issued. These payment provisions apply to all tiers of contractors, subcontractors and suppliers.

D. A creditor shall not collect, enforce a security interest against, garnish or levy execution on those progress payments or other payments that are owed by an owner, contractor or subcontractor to a person, or the owner’s contractor’s or subcontractor’s surety, who has furnished labor or material pursuant to a construction contract.

E. When making payments, an owner, contractor or subcontractor shall not retain, withhold, hold back or in any other manner not pay amounts owed for work performed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Publisher Name
Levelset
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57-28-6: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Levelset
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57-28-7: Care and Protection of Work

All material and work covered by partial payments become the property of the owner, but the contractor and subcontractor are not relieved from the sole responsibility for the care and protection of materials and work for which payments have been made; provided, however, the contractor and subcontractor have no duty for the care and protection of materials and work after the owner has assumed occupancy or use of the work.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Levelset
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57-28-8: Final Completion

Ten days after certification of completion, any amounts remaining due the contractor or subcontractor under the terms of the contract shall be paid upon the presentation of the following:

A. a properly executed release and duly certified voucher for payment;

B. a release, if required, of all claims and claims of lien against the owner arising under and by virtue of the contract other than such claims of the contractor, if any, as may be specifically excepted by the contractor or subcontractor from the operation of the release in stated amounts to be set forth in the release; and

C. proof of completion.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Publisher Name
Levelset
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57-28-9: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Publisher Name
Levelset
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57-28-10: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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57-28-11: Attorney Fees

In an action to enforce the provisions of the Prompt Payment Act, the court may award court costs and reasonable attorney fees.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Prompt Payment Statute on Public Projects

57-28-1: Short Title

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Publisher Name
Levelset
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57-28-2: Definitions

As used in the Prompt Payment Act:

A. “construction” means building, altering, repairing, installing or demolishing in the ordinary course of business any:

(1) road, highway, bridge, parking area or related project;

(2) building, stadium or other structure;

(3) airport, subway or similar facility;

(4) park, trail, athletic field, golf course or similar facility;

(5) dam, reservoir, canal, ditch or similar facility;

(6) sewage or water treatment facility, power generating plant, pump station, natural gas compression station or similar facility;

(7) sewage, water, gas or other pipeline;

(8) transmission line;

(9) radio, television or other tower;

(10) water, oil or other storage tank;

(11) shaft, tunnel or other mining appurtenance;

(12) electrical wiring, plumbing or plumbing fixture, gas piping, gas appliances or water conditions;

(13) air conditioning conduit, heating or other similar mechanical work;

(14) leveling or clearing land;

(15) excavating earth;

(16) drilling wells of any type, including seismographic shot holes or core drilling; and

(17) similar work, structures or installations;

B. “contractor” means a person performing construction through a contract with an owner;

C. “owner” means a person, local public body or state agency other than the department of transportation;

D. “person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or similar legal entity; and

E. “subcontractor” means a person performing construction for the owner not through a contract with the owner.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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57-28-3: Applicability of Act

The provisions of the Prompt Payment Act do not apply to construction contracts for residential property containing four or fewer dwelling units.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
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Publisher Name
Levelset
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57-28-4: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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57-28-5: Payments; Prompt Pay Required; Withholding Prohibited

A. Except as provided in Subsection B of this section, all construction contracts shall provide that payment for amounts due shall be paid within twenty-one days after the owner receives an undisputed request for payment. Payment by the owner to the contractor may be made by first-class mailing, electronic funds transfer or by hand delivery of the undisputed amount of a pay request based on work completed or service provided under the contact. If the owner fails to pay the contractor within twenty-one days after receipt of an undisputed request for payment, the owner shall pay interest to the contractor beginning on the twenty-second day after payment was due, computed at one and one-half percent of the undisputed amount per month or fraction of a month until the payment is issued. If an owner receives an improperly completed invoice, the owner shall notify the sender of the invoice within seven days of receipt in what way the invoice is improperly completed, and the owner has no further duty to pay on the improperly completed invoice until it is resubmitted as complete.

B. A local public body may make payment within forty-five days after submission of an undisputed request for payment when grant money is a source of funding, if:

(1) the construction contract specifically provides in a clear and conspicuous manner for a payment later than twenty-one days after submission of an undisputed request for payment; and

(2) the following legend or substantially similar language setting forth the specified number of days appears in clear and conspicuous type on each page of the plans, including bid plans and construction plans: “Notice of Extended Payment Provision

This contract allows the owner to make payment within ____________ days after submission of an undisputed request for payment.”.

C. All construction contracts shall provide that contractors and subcontractors make prompt payment to their subcontractors and suppliers for amounts owed for work performed on the construction project within seven days after receipt of payment from the owner, contractor or subcontractor. If the contractor or subcontractor fails to pay the contractor’s or subcontractor’s subcontractor and suppliers by first-class mail or hand delivery within seven days of receipt of payment, the contractor or subcontractor shall pay interest to the subcontractors and suppliers beginning on the eighth day after payment was due, computed at one and one-half percent of the undisputed amount per month or fraction of a month until payment is issued. These payment provisions apply to all tiers of contractors, subcontractors and suppliers.

D. A creditor shall not collect, enforce a security interest against, garnish or levy execution on those progress payments or other payments that are owed by an owner, contractor or subcontractor to a person, or the owner’s contractor’s or subcontractor’s surety, who has furnished labor or material pursuant to a construction contract.

E. When making payments, an owner, contractor or subcontractor shall not retain, withhold, hold back or in any other manner not pay amounts owed for work performed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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57-28-6: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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57-28-7: Care and Protection of Work

All material and work covered by partial payments become the property of the owner, but the contractor and subcontractor are not relieved from the sole responsibility for the care and protection of materials and work for which payments have been made; provided, however, the contractor and subcontractor have no duty for the care and protection of materials and work after the owner has assumed occupancy or use of the work.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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57-28-8: Final Completion

Ten days after certification of completion, any amounts remaining due the contractor or subcontractor under the terms of the contract shall be paid upon the presentation of the following:

A. a properly executed release and duly certified voucher for payment;

B. a release, if required, of all claims and claims of lien against the owner arising under and by virtue of the contract other than such claims of the contractor, if any, as may be specifically excepted by the contractor or subcontractor from the operation of the release in stated amounts to be set forth in the release; and

C. proof of completion.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
Publisher Logo

57-28-9: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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57-28-10: Repealed

Repealed.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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57-28-11: Attorney Fees

In an action to enforce the provisions of the Prompt Payment Act, the court may award court costs and reasonable attorney fees.

Summary
New Mexico Prompt Payment Law
Article Name
New Mexico Prompt Payment Law
Description
Summary of New Mexico Prompt Payment requirements and laws for New Mexico construction projects including free forms, FAQs, resources and more.
Author
Publisher Name
Levelset
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