Bill > HB05685

This bill modifies Connecticut's existing law regarding payment practices in construction contracts to enhance protections for subcontractors and suppliers. The bill requires construction contracts to include provisions mandating timely payments: owners must pay contractors within 30 days of a written payment request, contractors must pay subcontractors within 7 days of receiving payment or 60 days after work is completed (whichever comes first), and subcontractors must similarly pay their own subcontractors within 25 days. If payments are not made on time, the unpaid party can send a notice by registered or certified mail, after which the non-paying party becomes liable for 1% monthly interest. The bill also prohibits withholding payment due to disputes between different contractors or subcontractors, and establishes that subcontractors and suppliers can take direct legal action against owners if they are not paid. Importantly, the bill invalidates any contract provisions attempting to circumvent these payment requirements, effectively eliminating "pay-if-paid" clauses that previously allowed contractors to avoid paying subcontractors until they themselves were paid. The law is set to take effect on October 1, 2025, and aims to create more financial predictability and fairness in the construction industry.