Arizona Extends Prompt Payment Protection to Design Professionals
Effective July 3, 2015, architects and engineers are entitled to prompt payment for services provided on many public projects in Arizona.
Since the original enactment of the Arizona
Prompt Payment Act in 2000, Arizona licensed contractors and
subcontractors and material suppliers have enjoyed prompt payment
protection in connection with
private construction projects. Other legislation has extended
similar protection for work performed on
Unfortunately for design professionals,
Arizona law has not provided similar protection to them. That
changed, to a degree, on July 3, 2015, when the
Arizona Design Professional Prompt Pay Act went into effect. The
Act provides prompt payment for architects and engineers that
perform work on public (but not private) construction projects.
The Act amended various statutes that affect payment to
design professionals on public projects.
Contracts with Contractors and Subs
A.R.S. § 34-221 now provides that, on public projects for entities other
than the State of Arizona or the Arizona Department of
Transportation (ADOT), a contractor’s prompt payment obligations to
subcontractors and suppliers protects design professionals as well.
Specifically, payment is due to the design professional within seven
days after the contractor (or subcontractor) receives payment. Late
payments are subject to interest of 1% per month.
Similar prompt payment protection for design
professionals is contained in amendments to A.R.S. § 41-2577 and
A.R.S. § 28-411 for work performed for, respectively, the State of
Arizona and ADOT.
It is important to note that
prompt payment protection still does not apply to amounts owed to
design professionals whose contract is directly with the public
entity. The new Act applies only to public projects in which the
design professional is retained by the contractor.
Nevertheless, many architects and engineers
will benefit from the newly enacted statutory provisions that help
ensure that they will be paid in a timely fashion.
Arizona Prompt Payment Act | Getting Paid: Mechanics’ Liens, Payment Bond Claims on Private
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