What does Alabama’s prompt payment law require on private construction?

In Alabama, unless the contract sets other payment terms, an owner pays a contractor within 30 days after receiving a pay request or invoice, a contractor pays a subcontractor within seven days of being paid by the owner, and a late payment carries interest of 1% a month (12% a year). An owner must notify a contractor in writing within 15 days of receiving a disputed request for payment, and may withhold no more than twice the disputed amount. Retainage is capped at 10 percent and stops after 50 percent completion. The law does not apply to residential homebuilders, to residential improvements of 16 or fewer units, to contracts of $10,000 or less, or to contracts with the state or local governments. A written contract can set its own payment terms where the statute allows. This is Ala. Code §§ 8-29-3, 8-29-4, 8-29-7.

WhatAlabama
Payment deadlineOwner 30 days; sub 7 days after paid; 1% a month
Who this coversPrivate construction, not only public works

What the statute says

“… the owner, contractor, or subcontractor shall be obligated to pay his or her contractor, subcontractor, or sub-subcontractor interest at the rate of one percent per month (12% per annum) on the unpaid balance due …”

Quoted word for word from the section’s text.

Source

Ala. Code §§ 8-29-3, 8-29-4, 8-29-7

Read the statute in the Code of Alabama (Alabama Legislature): alison.legislature.state.al.us.

Checked against the statute on November 15, 2026.

This is a summary of a published statute, not legal advice. Rules change, local ordinances can add to them, and the terms of a specific lease may differ. Check the citation and speak to a lawyer before acting.

How Seayora uses this rule

A contractor on Seayora keeps every job’s dates, its estimate, its invoices and its payments in one record, so the date work was last performed, the date each invoice went out and the amount still owed are on file when a lien or payment deadline is counted.

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