Payment Disputes in Missouri Construction
The attorneys with our Firm provide legal advice and counsel to parties
involved in disputes involving payment in construction project cases.
Payment disputes in construction are not uncommon, especially given the
challenges naturally involved in completing construction projects in the
face of a variety of factors and events that are often difficult to anticipate
or forecast. Nonetheless, laws exist in Missouri to protect parties in
such disputes to ensure payment is made in a timely fashion. Our attorneys
know these laws and can help assert or protect your legal rights in construction
payment disputes.
Missouri Private Prompt Payment Act
The Private Prompt Payment Act was adopted in Missouri in 1995 to fix continuing
problems general and subcontractors had receiving timely payment for work
performed.
See § 431.180 RSMo.;
see also § 436.300 RSMo. Under the Private Prompt Pay Act, any person who makes
a contract for private design or construction work must make all scheduled
payments pursuant to the terms of the contract. § 431.180.1 RSMo.
The Act broadly defines “design or construction work” as including
“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
suck work.” § 431.180.4 RSMo. However, the Act contains an
exception: it does
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.” § 431.180.3 RSMo.
The Act creates a right for a person to file a lawsuit against a person
who has failed to pay pursuant to the terms of a contract. If a person
prevails in such a lawsuit, “[t]he 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.” § 431.180.2
RSMo. The Act further clarifies that, “[i]f the parties elect to
resolve the dispute by arbitration…the arbitrator may award any
remedy that a court is authorized to award hereunder.”
Id.
In short, Missouri’s Private Prompt Payment Act puts teeth into collection
efforts in construction cases by subjecting persons who do not make timely
payments to the imposition of additional liabilities in the form of statutory
interest and attorneys’ fees.
Missouri Public Prompt Payment Act
The Public Prompt Payment Act was passed in Missouri in 1990 to set forth
requirements applicable to terms and performance of public works contracts.
See § 34.057 RSMo. The Public Prompt Payment Act differs in many respects
from the Private Prompt Payment Act. The requirements of the Public Prompt
Payment Act are extensive and cover payment timing, payment amounts,
retainage or withholding of funds, and penalties for improper payment withholding.
Contact Us
If you would like to further discuss a matter or dispute regarding payment
pursuant to a private or public construction contract, please contact
the Law Offices of Kevin J. Dolley by phone at (314) 645-4100 or by email at
kevin@dolleylaw.com.