The Prompt Payment Act, Texas Property Code Sec. 28.002(b), also provides that a contractor who receives payment under 28.002(a) (above) must pay its subcontractors the portion of the owner’s payment, including interest, within 7 days of receiving the Owner’s payment. Section (a) provides that an owner must pay its contractor within 35 days of receiving a payment request for work performed in improving the owner’s property. If an Owner fails to pay the contractor the undisputed amount within the timelimits set forth above, the contractor or and subcontractor may suspend performance after providing 10-days notice to the Owner and the Owner’s Lender. There is a portion of the code that relates to work that is disputed. However, the Owner cannot just simply not pay the invoice. The Code provides a process that must be followed, otherwise, the contractors can halt work in those situations as well.
These Property Code sections do not apply to residential construction including duplex, triplex or quadruplexes or construction for a governmental entity.