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Contractor/Subcontractor Payment Act

Contractor/Subcontractor Payment Act

Contractor/Subcontractor Payment Act


Referred to as CASPA, this statute applies to work performed on commercial construction contracts, and residential construction contracts in which a minimum of six units are simultaneously under construction in Pennsylvania.

This statute provides for adherence to a payment schedule among all parties in the contract. Unlike a Mechanic’s Lien, the Court or Arbitrator can award contractual attorneys’ fees and/or interest on payment amounts that are withheld – so long as the withholding isn’t a result of poor work performance. In addition, if money is found to be wrongfully withheld, attorney’s fees, interest, and, penalties may also be assessed pursuant to the statute.

Generally with CASPA, if a construction contract does not set forth a payment schedule or a timetable for when payments must be made, the owner must pay a contractor within 20 days after the end of the billing period or the receipt of an invoice, whichever is later. CASPA also directs a contractor to pay a subcontractor within 14 days after the contractor’s receipt of each progress or final payment request, or 14 days after the subcontractor’s invoice, whichever is later.

With respect to retainage, CASPA directs owners and contractors to pay contractors and subcontractors within 30 days after final acceptance of the work. But, CASPA does provide, in certain situations, a “pay-when-paid” provision that requires payment within 14 days after a contractor receives payment.

It should be carefully noted that if payments for deficiencies are found to be rightfully withheld, the party bringing the collection action under CASPA could be liable for paying the adverse party’s attorneys’ fees.

Engaging an attorney who is experienced in these matters is highly recommended as these types of collections actions can be complicated and difficult. If you would like more information, or to discuss a potential construction collection, call 412-281-5060 or send our attorneys an e-mail by completing the contact form on this website.