North Carolina Contractor's Affidavit of Payment to Subs
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How to fill out Contractor's Affidavit Of Payment To Subs?
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FAQ
In North Carolina, pay-when-paid clauses are unenforceable. In South Carolina, however, they generally can be enforced; so standard contracts issued in the state may contain the provision.
AIA Document G70621221994 requires the contractor to list any indebtedness or known claims in connection with the construction contract that have not been paid or otherwise satisfied.
Public projects As for payments to subcontractors, both periodic and final payments are covered under the statute. North Carolina law states that once a prime contractor receives payment from the public entity, they are required to pay their subs and suppliers within 7 days of receipt.
S. 113 of the Construction Act prohibits pay when paid clauses except where a third party employer is insolvent. The Act, as originally drafted, defined insolvent by reference to the Insolvency Act 1986. Shepherd included such a clause in its sub-contracts.
In South Carolina, pay-when-paid clauses are generally enforceable. This means that the contractor can postpone payment to his subcontractors but only for a reasonable time to afford the contractor an opportunity to receive payment from the owner.
A direct payment clause says that if you have paid the main contractor for work done by subcontractors and your money is not passed on to them, you can pay the subcontractor directly and deduct the payment from any other monies due to the main contractor.
North Carolina has a three-year statute of limitations period on actions for breach of contract and negligence. This means that claims based on a contract with the builder must be brought within this period, or they are barred.
When the subcontractor does not get paid then they have grounds to pursue the contractor for monies owed. This could be in the form of wages or unpaid invoices for services rendered. In the USA, the owner of the property can be held liable for payment under a Mechanics Lien.
Set a payment schedule in the contract. You never want to pay a contractor more than 50% up front. Depending on the size of the job, your initial payment is ideally going to be no more than roughly 30% of the total cost of the project.