Construction Litigation Alert: Massachusetts Enacts "Prompt Payment" Legislation for Private Construction Contracts

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On August 10, 2010, Governor Deval Patrick signed into law “An Act Promoting Fairness in Private Construction Contracts.” See M.G.L. ch. 149, § 29E. This law is an important new regulation affecting payment terms on private construction projects. The law applies to owners, contractors, subcontractors, and lower tier subcontractors, and requires owners to pay contractors promptly and contractors, in turn, to pay subcontractors and suppliers promptly. In general, the new law requires contractors and subcontractors to submit applications for payment within thirty days of the end of the first calendar month occurring at least fourteen days after commencing work. Within fifteen days of the submission of the application for payment, the owner must approve or reject the application.1 Payment must be made within forty-five days of approval of the payment application. The new law also sets timetables on the processing of proposed change orders, and requires approval or rejection within thirty days of the change order request or commencement of work, whichever is later.

Please see full alert below for more information.

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