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.
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 email@example.com.