Construction Litigation

Q: I am a contractor that performed work under a written construction contract and have not been paid for my work.  The balance is now past due over 30 days. The property owner never notified me of any deficiencies in my performance. What recourse do I have?

A: In addition to the traditional remedies of breach of contract and mechanics’ liens, Pennsylvania law also provides a statutory remedy known as the Contractor and Subcontractor Payment Act (“Act”).  The Act provides that, unless agreed otherwise, payment shall be made within 20 days after the end of the billing cycle or 20 days after delivery of the invoice.  The Act assesses interest at the rate of 1% per month.  Notice must be provided by the owner to the contractor if any payment is withheld for a deficiency item.  If a contractor commences arbitration or litigation to recover payment and  it is determined that the owner violated the Act, the contractor is entitled to penalty interest of 1% per month.  The substantially prevailing party will be awarded a reasonable attorney fee and expenses.  Under the Act, subcontractors are entitled to rights similar to those of contractors.
Eric Smith, March 2010