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2726 S. Brentwood Blvd. St. Louis MO 63144

Missouri Private Prompt Payment Act

Missouri Private Prompt Payment Act Claims

Under Missouri's Private Prompt Pay Act, any person who makes a contract for private construction work must make scheduled payments pursuant to the terms of the contract. Every contractor or subcontractor must pay its subcontractors and suppliers for labor or materials provided under the terms of the contract.

The Prompt Pay Act was adopted in Missouri to fix continuing problems that general and subcontractors had receiving timely payment for work performed. Attorney Kevin J. Dolley provides advice and counsel to parties involved in disputes involving untimely payment in construction project cases.

Types of Construction Work that Falls Under the Private Prompt Pay Act

The Private Prompt Pay Act broadly includes construction work including "design, construction, alteration, repair or maintenance of any building, roadway or other structure or improvement to real property, or demolition or excavation" and further includes "the furnishing of surveying, architectural, engineering or landscape design, planning or management services, labor or materials, in connection with such work." The clear intent of the law is to reach the broad spectrum of construction work occurring in Missouri and the need for timely payment for such work. The Private Prompt Pay Act, however, does not apply to contracts for the building or remodeling of privately owned residential property of four (4) units or less.

Private Prompt Pay Act Litigation

The failure to may timely payment under the Private Prompt Pay Act means that the party that has not been paid is able to bring and action in Missouri circuit court against the party that has failed to pay. The court is entitled to award interest on the late payment of up to one and one-half percent interest per month from the date payment was due and reasonable attorneys' fees to the prevailing party. The parties are also able to litigate their construction disputes through arbitration and the arbitrator is entitled to award the same damages as would be awarded by a judge or jury.

The Prompt Payment Act puts teeth into collection efforts and sends a message to parties unwilling to make prompt payment in construction cases that they may be held liable for statutory interests and attorneys fees, making the refusal to pay a potentially costly decision.

Attorney Kevin J. Dolley works with parties to construction projects to prosecute cases for appropriate payment for the hard work done as part of a construction project. Mr. Dolley also defends and works with parties that are accused of failing to provide for prompt payment under Missouri law.

Payment Due Dates Under the Private Prompt Pay Act

The time frame by which payment is due under the Private Prompt Pay Act is left up to the parties to decide pursuant to the terms of the contract. The parties may decide to periodic payments under the terms of a construction contract or may decide to provide for payment in one lump sum. The determination of when timely payment must be made is solely within the discretion of the parties to the construction contract. Legal counsel that is able to draft clear language as to when payment is due under the terms of the contract is important in ensuring later collection under the terms of the Private Prompt Pay Act.

Statutory Interest Rate Under the Private Prompt Pay Act

The recoverable interest rate in Private Prompt Pay Act claims is determined pursuant to the terms of the contract. It is important for parties seeking payment under a contract to have the terms for interest set out in the construction contract. The interest rate that is payable under the Private Prompt Payment law is "up to one and one-half percent per month from the date payment was due pursuant to the terms of the contract."

Missouri Retainage Law

In addition to the terms of the Missouri Private Prompt Payment Act, Missouri law further sets a ten (10) percent limitation on construction retainage. The owner of a private construction project cannot withhold more than ten percent of each contractually agreed upon payment until completion of the project. The same retainable limits apply between contractors and subcontractors under Missouri law.

The exception to the retainage limits is when the contractor or other party within the contract chain posts a substitute security. The security may come from a bank, letter of credit or retainage bond. Once the full project is completed, the retainages must be paid within 30 days to contractors and payment must be made from contractors to subcontractors within seven days after the contractor receives payment of their retainage amount. If a duly owed retainage is not timely paid, a court or arbitrator may award interest and attorney's fees against the party that wrongly withheld the retainage.

Attorney Kevin J. Dolley provides legal counsel and litigation services to parties to ensure that their conduct complies with applicable Missouri retainage law and parties seeking to enforce violations of the retainage law requirements. Missouri law clearly sets out that the failure to strictly abide by the retainage law requirements results in an improper retainage withholding and potential legal consequences of such a wrongful act.

Missouri Construction Law Attorney

If you would like to further discuss a prompt payment act claim or prosecution or defense of any other construction contract claim, contact construction law attorney Kevin J. Dolley at 314-450-7883 or online.

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The Law Offices of Kevin J. Dolley represents clients in labor law, employment law and employment discrimination matters throughout the State of Missouri, including St. Louis, St. Louis County, St. Charles County, Boone County, Jefferson County, Lincoln County, Jackson County, Phelps County, Franklin County, Ste. Genevieve, St. Clair and the Cities of St. Louis, Kansas City, St. Charles, O'Fallon, Lake St. Louis, Hillsboro, Troy, Clayton, Rolla, Columbia, Jefferson City, Kirksville, Farmington, Cuba, Augusta, Union, Maryland Heights, Cape Girardeau and Springfield.

Law Offices of Kevin J. Dolley, LLC - Missouri Employment Lawyer
Located at 2726 South Brentwood Blvd. St. Louis, MO 63144. View Map
Phone: (314) 684-8180 | Local Phone: (314) 645-4100.