New Jersey’s Prompt Payment Act, N.J.S.A. 2A:30A-1 and 2 (Act), gives important rights to contractors and other parties who provide services or materials to construction projects in their quest for prompt payment. The Act also places heavy burdens on project developers and owners, requiring them to take certain actions by strict deadlines at the risk of waiving their right to dispute amounts claimed to be owed for construction work. This article discusses actions developers and owners should consider to protect their interests under the Act.

The Act

The Act broadly governs all contracts for “improvements” to real property and requires prompt payment to prime contractors, subcontractors, sub-subcontractors and suppliers of materials and equipment. The Act also requires prompt payment to architects, engineers and land surveyors who provide services on construction projects. The Act sets strict deadlines for the owner of a construction project to pay approved invoices for construction or design services, requiring payment within “30 calendar days after the billing date.”