Enforcing N.J.'s Prompt Payment Act Enforcing N.J.'s Prompt Payment Act

New Jersey’s Prompt Payment Act, N.J.S.A.2A:30A-1, et seq. (PPA), obligates a real estate owner who engages a contractor to make improvements to real property to: (1) pay promptly payments due to the contractor; (2) alternatively, object in writing to such payment; or (3) risk being subject to the PPA’s remedies of interest at 1 percent above prime on the unpaid amount and shifting of the contractor’s legal fees should it prevail in subsequent litigation.

There are few cases reported under the PPA. The only Appellate Division case construing the PPA is unpublished. In that case, Shore Mechanical Contractors v. W. G. Osborne Construction, 2008 WL 4107895 (App. Div. Sept. 8, 2008), the court held that the fee-shifting provision was mandatory, i.e., not discretionary, when the contractor prevailed. Recently, a decision in the Superior Court of New Jersey upheld the PPA remedies against the County of Warren in a case brought by one of its contractors on a county project. Aire Enterprises v. County of Warren, WNL-151-09.