Time to “Pay” Attention to Payment Provisions for Construction Contracts in Massachusetts
I know what you are thinking . . . payment provisions have ALWAYS been key components of construction projects. Owners want to understand what they are paying for and that they are not over-paying. Contractors want prompt payment provisions and limitations on an Owner’s ability to withhold payment. Lower tier subcontractors and suppliers want clarity, information and remedies, other than what can be a cumbersome mechanic’s lien process, to ensure that they will get paid in the event of a dispute. So, I absolutely agree, payment provisions are essential. If payment is not made or the payment applications are not provided per the terms of the contract, it can cause delays and additional costs for all project participants.
A number of years ago, Massachusetts passed the Massachusetts Prompt Pay Act, G.L. c. 149, §29E (the “Act”). The purpose of the Act is to create some ground rules that are read into each private construction contract that is $3,000,000 or more. It