News & Events

What is CASPA and What do Contractors and Subcontractors Need to Know About Recent Legal Changes?

by | Sep 8, 2018 | Industry News, Real Estate & Land Use

By: Veronica L. Boyer, Esq.

CASPA is Pennsylvania’s Contractor and Subcontractor Payment Act. It is the private industry version of the Prompt Payment Act, which applies to public projects. CASPA helps ensure that contractors and subcontractors working on commercial construction projects (or projects involving more than 6 residential units) get paid in a timely manner. The Act imposes penalties on owners or contractors who fail to pay their contractors or subcontractors. CASPA requires payment within a specified time period and provides for 1% per month interest (plus contractual interest) and a 1% per month penalty for amounts wrongfully withheld. It also provides for an award of attorneys’ fees and costs to the substantially prevailing party. CASPA was recently amended to prohibit contractual waivers of CASPA claims. This is important because it means that parties with greater bargaining power cannot force others to waive their rights under the Act. CASPA was also amended to permit suspension of work for non-payment as outlined in the Act. The Act can be a powerful tool for contractors and subcontractors to get paid for their work.