Bill > H383

This bill modifies North Carolina's laws regarding payments to subcontractors in construction projects by strengthening protections for subcontractors and clarifying payment requirements. The bill declares that "pay if paid" or "pay when paid" contract clauses, which make payment contingent on receiving payment from another party, are against public policy and unenforceable. It requires contractors to pay subcontractors within seven days of receiving periodic or final payments, and mandates payment within 30 days of receiving a billing if no earlier payment has occurred. The bill also establishes that payment by an owner to a contractor is not a prerequisite for a contractor paying a subcontractor, and vice versa. Additionally, the bill allows contractors to withhold payments in specific circumstances, such as unsatisfactory job progress or disputed work, and stipulates that delayed payments beyond the specified timeframes will accrue interest at 1% per month. The law does not apply to residential contractors or certain residential property improvements. The bill becomes effective immediately and applies to contracts entered into on or after its effective date, with the goal of providing more financial security and predictability for subcontractors in construction projects.

Housing and Urban Affairs

https://www.ncleg.gov/BillLookUp/2025/H383