There is a little known but potent tool for subcontractors and materialmen. It allows them to seek immediate payment on undisputed contract obligations due on public projects from general contractors who have already been paid.
Prompt Payment on Public Jobs
Is prompt payment a requirement? While a general contractor may find it preferable for cash flow reasons to not pay a subcontractor or materialman immediately after receiving payment for its portion of the work from the municipality or public entity, this is neither legal nor smart. General contractors would do well to heed the rulings of Florida’s courts. They have made clear that ignoring the prompt payment statute comes with the penalty of paying accrued interest, attorney’s fees and costs. A subcontractor is entitled to various immediate remedies for rapid recovery of any undisputed contract obligations.
Prompt Payment on Private Jobs
And it isn’t just on public jobs that subcontractors have this level of protection. Other Florida statutes provide similar guidelines for contractors performing private work. Florida Statute §713.346 states in pertinent part:
Any person who receives payment for constructing or altering permanent improvements to real property shall pay, in accordance with the contract terms, the undisputed contract obligations for labor, services or materials provided on account of such improvements.
Ever mindful of the uneven bargaining position in which most subcontractors and materialmen find themselves, the legislature sought to level the playing field. Follow the payment dollars; some of them may be yours.
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