By Lauren P. McLaughlin and Raziye “Raz” Andican of Smith Currie
Most lawsuits involving project participants include claims that one party violated the prompt payment statutes of the governing jurisdiction. As most readers know, prompt payment statutes are in place at the federal and state level to require timely payments to contractors (that is, that a party be paid within a certain number of days from receipt of funds from the owner). Because every jurisdiction has different requirements and timelines as to when a contractor is entitled to receive funds, the chart below provides the prompt payment statutes applicable to projects in the District of Columbia, Maryland, and Virginia. Note that both Maryland and the District of Columbia require prompt payment on not just public projects, but on private projects as well.
The information in this chart is current as of April 27, 2021 but should not be relied upon as accurate, timely, or fit for any particular purpose. The content of this chart is provided for general information purposes only and does not constitute legal or other professional advice or opinion of any kind.
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Prompt Payment for Commercial Construction in DC/MD/VA
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Venue
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Cite |
Owner To Prime |
Prime To Sub |
Sub To Lower Tiers |
Interest/Fees |
Other Comments |
| District of Columbia - Private |
D.C. Code §§ 27-132 to 27-136 |
Unless otherwise agreed, 15 days after the earlier of (a) acceptance, (b) owner takes possession, or (c) payment requests |
7 days of receipt of payment from owner |
7-day rule extends to second-tier subcontractors |
1.5% per month; attorneys' fees provision |
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| District of Columbia - Public |
D.C. Code §§ 2-221.01 to 2-221.06 |
30 days, excluding legal holidays, after invoice, unless otherwise agreed |
7 days after payment |
Interest at rate determined by mayoral regulation; no fees provision |
1.5% per month; attorneys' fees provision |
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| Maryland - Private |
Md. Code, Real Property, §§ 9-301 to 9-304 |
Progress payments as agreed; final payment 30 days after completion, unless otherwise agreed |
7 days after payment |
7 days after payment |
Interest at the legal rate; attorneys' fees only awarded for "bad faith" failure to pay "undisputed amounts" |
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| Maryland - Public |
Md. State Fin. & Proc. §§ 15-101 to 15-108, 15-226 |
30 days after the later of: (1) payment becomes due under procurement contract, or (2) receipt of invoice |
10 days after payment (§ 15-226) |
10 days after payment (§ 15-226) |
Interest at the legal rate; attorneys' fees only awarded for "bad faith" failure to pay "undisputed amounts" |
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| Virginia - Private |
None |
None |
None |
None |
None |
None |
| Virginia - Public |
Va. Code §§ 2.2-4347 to 2.2-4356 |
30 days after invoice or receipt of services, whichever is later, unless otherwise agreed for state agencies; 45 days after invoice or receipt of services, whichever is later, unless otherwise agreed for localities |
7 days after payment |
7 days after payment |
Interest at prime for state agency primes unless other rate is agreed; interest at 1% per month for subs and locality primes, unless other rate is agreed. Va. Code § 2.2-4354(4); no fees provision |
Notice of defects that would prevent timely payment must be sent within 15 days after receipt of the invoice or the defective goods or services. Va. Code § 2.2-4351 |
Lauren P. McLaughlin is a partner in the Tysons, Virginia office of Smith Currie & Hancock LLP. She has represented owners, developers, contractors, subcontractors, sureties and design professionals in all aspects of public and private construction projects. With that perspective, she counsels clients on project risk management and litigation avoidance. Lauren has successfully tried dozens of complex cases in state and federal courts throughout Maryland, Virginia, Pennsylvania, New York, and the District of Columbia, as well as before arbitral panels, administrative boards and boards of contract appeals. She can be reached at lpmclaughlin@smithcurrie.com or 703.506.1990.
Raziye “Raz” Andican, an attorney in the Tysons, VA office of Smith Currie & Hancock, focuses her practice on surety defense, real property disputes , and construction litigation, including filing and enforcing mechanic’s liens and representing owners, general contractors, and suppliers in various construction disputes. She can be reached at randican@smithcurrie.com or 703.506.1990.