How Long Does a GC Have to Pay a Subcontractor in Arizona?

Seven days. Once a general contractor in Arizona receives a progress payment, a retention release, or a final payment, it has seven days to pay each subcontractor the full amount received for that sub’s work. That is A.R.S. § 32-1183(B), and it is not a suggestion: from the eighth day, interest runs at 1.5% a month on the unpaid balance, and if you have to sue, the statute makes an award of reasonable attorney fees to the successful party mandatory.

The rest of the chain is just as specific. The owner has 14 days after receiving a billing to object in writing; say nothing and the billing is deemed certified and approved. Payment to the GC is then due within 7 days of approval under A.R.S. § 32-1182. So on a default private job, the full loop from the GC billing the owner to money in your account is about four weeks. This article walks that clock step by step, what “pay-if-paid” fine print does to it, and what actually works when a GC who has been paid decides you can wait.

The Arizona private-job payment clock, start to finish

Every deadline below comes straight from the statute. The clocks are defaults: a contract can stretch some of them, but only with conspicuous notice language the Act spells out, printed on every page of the plans. Buried fine print does not count.

What is the Arizona Prompt Pay Act, and why do the section numbers look wrong?

The Prompt Pay Act is Arizona’s payment-timing law for private construction, first enacted in 1989 and toughened in 2000 and 2010. It lives in Title 32, chapter 10, article 5 of the Arizona Revised Statutes: sections 32-1181 through 32-1188. If that looks unfamiliar, here is why. For decades these were numbered §§ 32-1129 through 32-1129.07, and nearly every subcontract, blog post, and demand-letter template in circulation still cites the old numbers. The Legislature renumbered the sections; the substance carried over. Old § 32-1129.01 (progress payments by the owner) is now § 32-1182, and old § 32-1129.02 (payment down the chain) is now § 32-1183. A contract that cites § 32-1129.02 is still pointing at live law, just under a new address.

The Act applies to “construction contracts,” which § 32-1181 defines as written or oral agreements for construction, alteration, repair, maintenance, demolition, or land improvement. You do not lose prompt-pay protection because the deal was a handshake. Public projects are excluded and covered by their own statute, A.R.S. § 34-221, which runs on a different clock we cover near the end.

How long does the owner have to pay the GC?

Fourteen days to object, then seven days to pay. Under § 32-1182(A), the GC bills the owner on a 30-day cycle by default, and the owner’s review window closes fast. The operative language in § 32-1182(D) is worth reading verbatim, because it is the part owners most often misunderstand:

That is what “deemed approved” means: silence is approval. An owner who wants to withhold has to say so in writing, within 14 days, with reasons in reasonable detail, and only for the reasons the statute lists, things like defective work not remedied, disputed work, or third-party claims. Even then, § 32-1182(E) caps the withholding at an amount sufficient to cover the direct costs the owner reasonably expects from the problem. Once a billing is approved, actually or by silence, payment is due in 7 days, and an owner who misses it owes the same 1.5% monthly interest under § 32-1182(Q). The 14-plus-7 rhythm repeats for retention release at substantial completion and for final payment.

One practical wrinkle: those clocks start when a billing goes in, not when your crew finishes. If you complete work the day after the GC submits its monthly pay application, your line item may wait most of a billing cycle before the owner even sees it. The Act polices what happens after billing; the billing calendar itself comes from the contract.

How long does the GC have once the owner pays?

Seven days, and the duty runs down every tier of the project. Here is the language:

Notice three things. It is the full amount received for your work, not a portion the GC finds convenient. It applies to every kind of payment, including retention and final payment. And it binds subcontractors toward their own subs and suppliers the same way it binds the GC.

Two conditions sit on your side of the ledger. The statute only obligates payment if you provided a billing or invoice in accordance with the subcontract terms, and it requires you to provide a conditional waiver of lien for the work being paid, which the GC may ask to have notarized. Keep both habits clean. A sub who never formally invoiced has a much weaker prompt-pay claim than one with a dated invoice trail.

A GC who wants to withhold from you has obligations of its own. If it chooses not to pass your billing through to the owner, § 32-1183(E) requires a written statement to you within 14 days stating its reasons in reasonable detail. If the owner refused to certify something that affects your money, § 32-1183(F) requires the GC to send you a copy of the owner’s written objection within 7 days of receiving it. And if the owner withheld over defective work that was not yours, § 32-1183(G) says the GC must still pay the unaffected subs within 21 days of when the owner’s payment would otherwise have been made. A GC who stays silent and says “the owner is slow” for six weeks is not following the statute, and the paper it failed to send you is evidence.

The interest and the attorney fees

§ 32-1183(H) sets the meter: if payment to a sub or supplier is delayed more than seven days after the GC received the money, interest accrues “beginning on the eighth day, at the rate of one and one-half percent per month or a fraction of a month on the unpaid balance or at such higher rate as the parties agree.” That is 18% a year, and “fraction of a month” means a payment eight days late still incurs a full month’s charge. On an $18,000 balance, that is $270 a month of the GC’s money, automatically, with no contract clause needed.

The sharper tooth is § 32-1183(J): in any action or arbitration brought to collect payments or interest under the section, “the successful party shall be awarded costs and attorney fees in a reasonable amount.” Shall, not may. That single word changes the economics of chasing a five-figure receivable, and it cuts both ways, which is why the demand letter you send should only claim amounts you can prove.

Are pay-if-paid clauses enforceable in Arizona?

This is the fine print that decides whether the seven-day rule helps you at all when the owner goes broke, so read your subcontract for it before you sign. There are two different animals here, and the wording matters more than the label:

• Pay-when-paid language (“contractor shall pay subcontractor within ten days of receipt of payment from owner”) is generally treated as a timing provision. It tells you when payment happens in the normal case. If the owner never pays, the GC still owes the money after a reasonable time.
• Pay-if-paid language makes owner payment a condition precedent: if the owner never pays, the GC’s obligation to you never arises. You absorbed the owner’s credit risk.

Arizona enforces the second kind, but only when it is unmistakable. In L. Harvey Concrete, Inc. v. A.G.R.O. Construction & Supply Co., 189 Ariz. 178, 939 P.2d 811 (App. 1997), the Court of Appeals enforced a clause that clearly conditioned the GC’s duty to pay on receiving payment from the owner, holding the sub had agreed to a condition precedent. Ambiguity breaks the other way: a clause that just describes timing does not shift the risk of owner non-payment onto you.

Here is the honest part most summaries skip. The Prompt Pay Act opens with this, at § 32-1183(A): “Notwithstanding the other provisions of this article, performance by a contractor, subcontractor or material supplier in accordance with the provisions of a construction contract entitles the contractor, subcontractor or material supplier to payment from the party with whom the contractor, subcontractor or material supplier contracts.” And § 32-1182(P) adds that a construction contract “shall not alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payments as provided under this article.” Subcontractors argue that language kills pay-if-paid clauses. GCs point out L. Harvey was decided eight years after that language passed and the court enforced the clause anyway. Per the State Bar of Arizona’s construction law practice manual, no reported Arizona decision has resolved how the Act and pay-if-paid clauses interact. Until one does, assume a clean condition-precedent clause is enforceable, and negotiate it out or price the risk in.

Can you stop work when you’re not being paid?

Yes, and this is the most underused right in the Act. A.R.S. § 32-1185 lets a subcontractor suspend performance or terminate the contract over non-payment of certified and approved amounts, after short written notice:

• Owner never paid the GC for your certified work, and the GC has not paid you: 3 calendar days’ written notice to the contractor and owner (§ 32-1185(B)).
• Owner paid the GC for your certified work, and the GC is sitting on it: 7 calendar days’ written notice (§ 32-1185(C)).
• Owner refused to certify parts of the GC’s billing for reasons that are not your fault: 7 calendar days’ notice (§ 32-1185(D)).

A sub who suspends under this section “shall not be deemed in breach of a construction contract” (§ 32-1185(B)–(D)), does not have to furnish further labor or materials until paid the certified amount, and can recover mobilization costs from the shutdown and restart (§ 32-1185(E)). The notice has to be delivered in person or by a method with third-party written verification of delivery, so send it certified or by a courier that gives you a receipt, not a text message. Two more protections: the contract cannot extend these notice periods, and under A.R.S. § 32-1186, a clause saying you cannot suspend or terminate for non-payment is void as against public policy, along with clauses forcing disputes into another state.

The GC got paid and still won’t pay you. Now what?

Work the tools in order. Each step makes the next one more credible, and the paper you generate at each step is what wins the last one.

1. Confirm the owner actually paid. Under § 32-1182(R), you can send the owner a written request to be notified within five days whenever a progress payment, retention release, or final payment goes to the GC, and one request stays in effect for your whole time on the project. Send it at project start on every job from now on. It converts “the owner is slow” from an unfalsifiable excuse into a checkable fact.
2. Send a written demand that does the math. Cite § 32-1183(B), state the date the GC received payment if you know it, the amount owed for your work, and the interest accruing at 1.5% per month from day eight under § 32-1183(H). Mention that § 32-1183(J) awards attorney fees to the successful party. A demand that quotes the statute and shows a running interest number reads very differently from a fourth “checking in on this invoice” email.
3. Give the suspension notice. If the demand changes nothing and you are still on the job, a 7-day notice under § 32-1185(C) is usually the moment a stalled payment becomes urgent for the GC, because now the schedule is at risk and your suspension is statutorily protected.
4. File with the Registrar of Contractors. § 32-1183(B) makes any diversion of payments received for your work, or failure to reasonably account for them, grounds for discipline against the GC’s license, up to suspension or revocation. A licensed sub filing a prompt-pay complaint posts a surety bond or cash deposit of $500 or half the amount due, whichever is less (§ 32-1183(I)), refundable unless the complaint is found frivolous. A license at risk gets attention that an unpaid invoice does not.
5. Preserve your lien rights in parallel, where they exist. A lien is leverage against the property, independent of the GC’s solvency. It requires a preliminary twenty-day notice served near the start of your work (A.R.S. § 33-992.01) and recording within 120 days of completion, or 60 if a notice of completion was recorded (A.R.S. § 33-993). The hard limit for residential subs: A.R.S. § 33-1002 bars liens on an owner-occupied dwelling unless you contracted in writing directly with the owner-occupant, which a sub under a GC almost never did. We cover that trap, and what replaces the lien on those jobs, in our guide to Arizona mechanics liens on owner-occupied homes.
6. Sue or arbitrate, with the fee award in view. With approved billings, proof of owner payment, your demand letter, and the interest calculation, § 32-1183(J) means a clean case can make the GC fund your lawyer. That posture settles most disputes before a filing.

The broader collections playbook, including how to stop final invoices from aging out in the first place, is in our piece on free estimates and unpaid invoices.

What about public jobs? A.R.S. § 34-221 in brief

Government work in Arizona runs on a parallel statute with different numbers. Under A.R.S. § 34-221, the GC’s estimate is deemed approved 7 days after submission unless the agency issues a specific written finding, payment to the GC is due within 14 days after approval, and the agency retains 10% of each estimate, with half of the retained amount releasable on request at 50% completion and retention dropping to 5% after that if progress is satisfactory (§ 34-221(C)(3)); final retention is payable within 60 days after final completion. The GC must still pay subs within 7 days of receiving each payment, though on public work the statute lets the parties agree in writing to different timing. Late-payment interest is 1% per month (§ 34-221(J), (K)), lower than the private-side 1.5%. And because you cannot lien government property, an unpaid sub’s security is the payment bond: under A.R.S. § 34-223, claimants without a direct contract with the GC must give a written 90-day notice, and any bond suit must be filed within one year of last labor or materials.

One more carve-out: custom homes for owner-occupants

If the project is construction of a dwelling for an owner-occupant, A.R.S. § 32-1188 says the owner-side payment rules in § 32-1182 do not apply unless each billing to the homeowner carries a prescribed notice legend telling them the Prompt Pay Act governs. GCs on custom-home work should be printing that legend on every invoice; without it, the 14-day deemed-approval clock never binds the homeowner. The seven-day duty in § 32-1183 keys off money the GC actually receives, so document what came in and when, whatever kind of project it is.

Which Arizona statutes actually set these deadlines?

Arizona’s prompt payment rules are not one statute but eight, and they were renumbered along the way: the sections older contracts cite as A.R.S. §§ 32-1129 through 32-1129.07 are now §§ 32-1181 through 32-1188, so an old reference still points at live law. Two sections carry almost all the weight. Section 32-1182 runs the clock between the owner and the general contractor; section 32-1183 runs the clock between the general contractor and you. The rest handle what happens when that clock gets ignored: interest, attorney fees, your right to stop work, and the public-works version that swaps different numbers into the same structure.

Where we fit

Everything above is about getting money that has to pass through someone else’s hands first. The other fix is structural: carry some work where there is no GC between you and the customer. FindAZPros sends Phoenix Pros direct referral jobs from realtors, property managers, and inspectors. You quote the customer, you invoice the customer, and the seven-day statute never has to enter the conversation. Listing is free, we cover 16 Phoenix regions and 23 trades, and we get paid by the Pro only after a completed job, never a cent from selling your phone number. If you are building that side of your book from scratch, start with how new Arizona contractors land their first jobs, then get listed.

Sources

• A.R.S. § 32-1181, definitions and applicability (Prompt Pay Act)
• A.R.S. § 32-1182, progress payments by owner; 14-day deemed approval; interest (formerly § 32-1129.01)
• A.R.S. § 32-1183, payment to subcontractors within 7 days; 1.5% monthly interest; attorney fees (formerly § 32-1129.02)
• A.R.S. § 32-1185, suspension of performance and termination for non-payment
• A.R.S. § 32-1186, void contract provisions
• A.R.S. § 32-1188, owner-occupant dwelling notice requirement
• A.R.S. § 34-221, public works progress payments, retention, and interest
• A.R.S. § 34-223, public works payment bond claims
• A.R.S. § 33-992.01, preliminary twenty-day notice
• A.R.S. § 33-993, lien recording deadlines
• A.R.S. § 33-1002, owner-occupied dwelling lien limitation
• L. Harvey Concrete, Inc. v. A.G.R.O. Construction & Supply Co., 189 Ariz. 178, 939 P.2d 811 (App. 1997)
• State Bar of Arizona, Arizona Construction Law Practice Manual, ch. 4.2, Arizona’s Prompt Payment Laws (2016)

This is general information about Arizona’s prompt payment statutes, not legal advice. Deadlines and notice formats are unforgiving, and contracts can change some of them. For a live dispute, speak with an Arizona construction attorney.