Two deadlines, two payers
Georgia's Prompt Pay Act sets two separate clocks in O.C.G.A. 13-11-4, and the exam tests whether you keep them apart.
- Owner to contractor, 15 days. Under 13-11-4(a), once the contractor has performed under the contract, the owner must pay within 15 days of receipt of any payment request by the owner or the owner's representative.
- Contractor to subcontractor, 10 days. Under 13-11-4(b), the contractor must pay each subcontractor within 10 days of receipt of each periodic or final payment.
The trap: the 15 days belongs to the owner and the 10 days belongs to the contractor. Swapping the two is the most common error. A 30-day period is not the statutory default, and the 7-day figure comes from lien waiver law (sending the owner a copy of an affidavit of nonpayment), not prompt pay.
What starts each clock
The owner's 15 days run from receipt of the payment request. The contractor's 10 days run from the contractor's receipt of payment, not from the subcontractor's invoice date and not from completion of the sub's work.
How much the sub gets
The contractor must pay the full amount received for that subcontractor's work. There is no 10% handling charge, no half now and half at final payment, and no choosing an amount.
Limits on the 10-day duty
- It applies once the subcontract's conditions precedent to payment are met.
- The contractor may require reasonable assurances, such as bonds.
- It covers each periodic or final payment, not just final payment.
- It runs down the chain: each subcontractor must pay its own subcontractor within 10 days, so it is not limited to first-tier subs.
Computing the date
Add the days to the receipt date.
- Owner receives a request March 3, contract silent: March 3 + 15 = March 18. March 13 is the 10-day swap.
- Contractor is paid May 5, sub's conditions met: May 5 + 10 = May 15. May 20 is the 15-day swap.