Contractors have been operating within the current version of Pennsylvania’s Contractor and Subcontractor Payment Act (“CASPA”) for almost 25 years. However, effective today, there are numerous significant revisions and additions to CASPA. These changes continue to alter the status quo in construction contracts and further protect builders seeking payments.
The revisions include: not allowing parties to waive the protections afforded by CASPA; allowing contractors and subcontractors to stop work in the event of nonpayment; allowing parties to withhold payment for defective work by providing a good faith explanation for the holdback; parties’ rights when an invoice is incorrect; contactors and subcontractors’ rights to obtain retainage owed to them; and penalties for “wrongfully withheld” payments – which phrase is now expressly defined by the Act. These amendments provide much needed clarification to the existing law and add significant additional protections.
Many in the industry who do not include such specific language in their contracts, or fail to pay close attention when it is present need to familiarize themselves with the new amendments. CASPA now requires owners, contractors and subcontractors alike to understand its statutory changes and address them appropriately or face serious monetary consequences. Construction industry professionals should contact their counsel at Meyer, Unkovic & Scott LLP to educate themselves and ensure any standard forms are in compliance with the Act’s changes.
For additional questions, please contact your counsel at Meyer, Unkovic & Scott LLP.
This material is for informational purposes only. It is not and should not be solely relied on as legal advice in dealing with any specific situation.