Utah Prompt Payment Requirements
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For Prime Contractors, N/A to progress payment. Final / Retainage payment due by the later of 45 days from invoice or 45 days from certificate of occupancy.
For Subcontractors, progress payments due within 30 days of receipt of payment from above. Final / Retainage payment due within 10 days of receipt of payment from above.
For Suppliers, progress payments due within 30 days of receipt of payment from above. Final / Retainage payment due within 10 days of receipt of payment from above.
Interest & Fees
Interest at 1% per month. Subs can recover reasonable costs of collection and attorneys' fees.
For Prime (General) Contractors, progress payment due within 60 days of invoice. Can be modified by contract. final payment due within 45 days of the later of invoice or certificate of completion.
For Subcontractors, payment due within 7 days of the later of receipt of payment from above, or receipt of invoice
For Suppliers, payment due within 7 days of the later of receipt of payment from above, or receipt of invoice
Interest & Fees
Interest at IRS refund rate plus 2% for prime; interest at 15.5% year for sub.
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 Utah
The Utah prompt payment laws set payment deadlines and penalties for both public and private construction projects within the state.
Utah prompt payment laws on all private construction projects can be found in Utah Code §13-8-5, and §58-55-603.
Deadlines for Payment on Private Projects
Progress payments from the property owner to the prime contractor will be governed under the terms of the contract. For final payments, including retainage, the owner must pay the prime within 45 days of receipt of a request for final payment, or the issuance of a certificate of occupancy; whichever is later. Regarding payments to subcontractors, the prime must make progress payments within 30 days after they received payment. Final payments must be made within 10 days of when the prime received payment. The same deadlines apply to subsequent payments down the payment chain.
Penalties for Late Payment for Private Projects
Utah’s prompt payment laws do provide a list of reasons why payment can be properly withheld. If none of these circumstances exist, and payment is either late or wrongfully withheld, interest will begin accruing at a rate of 1% per month until payment is made. Also, if the dispute goes to court, the prevailing party will be awarded attorney fees.
Payments on public works projects in Utah are regulated by Utah Code §13-8-5, and §15-6-1 et seq. These rules apply to all Utah public construction projects, except those that involve federal funds, or a mix of state and federal funds.
Deadlines for Payment on Public Projects
Progress payments made from the public entity to the prime contractor will be determined by the contract terms. However, if the contract is silent, then the prompt pay deadlines are enforced, which requires progress payments to be made to the prime contractor within 60 day of receipt of a request for payment. Final payments to the prime must be made within 45 days of receipt of a request for final payment, or the issuance of a certificate of occupancy; whichever is later. As for payments to subcontractors and suppliers down the payment chain, progress payments must be made within 30 days of the higher-tiered party receiving payment. While final payments must be passed along within 10 days of receipt of payment.
Penalties for Late Payment for Public Projects
The Utah prompt payment statute for public projects, just as for private jobs, provides a list of reasons that payment can be properly withheld. If these reasons aren’t present, and payment is late or wrongfully withheld, interest will begin accruing. For late payments to prime contractors, the interest rate will be the IRS refund rate plus 2%. Late payments to subcontractors will be subject to an interest rate of 15.5% per year