The Arizona Prompt Pay Act (APPA) is a law that governs the timing of payments in construction contracts. The APPA requires general contractors to pay subcontractors and suppliers within specific timeframes after receiving payment.  It serves to prevent withholding or 'squeezing' payment that is owed, which was historically a major problem in Arizona.

It is important for general and subcontractors to heed the warnings and requirements of Prompt Pay. Failure to timely object to  bad workmanship can be deemed a waiver/acceptance and start the clock on payment.  Prompt pay calculates interest at 18%, which on large sums can quickly eat into profit margins. Additionally, failing to timely pay may subject a contractor to a Registrar of Contractors complaint and discipline.

Prompt Pay is a remedy supplemental to mechanic's liens.  Both should be pursued to maintain  leverage. Prompt pay is not an independent claim, but rather is a provision that applies in a breach of contract. Still, there are some applicable defenses to payment, even if not timely objecting to work.  Given the interest component, it is important to calendar payment and objection deadlines, as well as act quickly if and when you find yourself on either side of a Prompt Pay situation. These simply cases can at times become complex.  Please call us if you need assistance determine your rights on Prompt Pay issues.