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

In North Carolina, a contractor on a private construction project must pay a subcontractor the full amount received for its work within seven days after receiving each periodic or final payment, and a payment delayed longer bears interest at one percent a month from the eighth day. Chapter 22C sets no deadline for an owner’s payment to the contractor, but payment by the owner is not a condition precedent to the contractor paying a subcontractor, and an agreement to the contrary is unenforceable. A contractor may withhold a subcontractor’s payment application for listed reasons, such as unsatisfactory job progress, defective work not remedied, disputed work or third-party claims, and may hold retainage no higher than the owner’s initial percentage. The chapter does not apply to residential contractors, to residential improvements exempt from Chapter 83A, or to residential improvements of 12 or fewer units. A written contract can set its own payment terms where the statute allows. This is N.C. Gen. Stat. §§ 22C-1, 22C-2, 22C-3, 22C-4, 22C-5, 22C-6.

WhatNorth Carolina
Payment deadlineSubs paid within 7 days; 1% a month after that
Who this coversPrivate construction, not only public works

What the statute says

“… the contractor shall pay to his subcontractor and each subcontractor shall pay to his subcontractor, within seven days of receipt by the contractor or subcontractor of each periodic or final payment, the full amount received for such subcontractor’s work …”

Quoted word for word from the section’s text.

Source

N.C. Gen. Stat. §§ 22C-1, 22C-2, 22C-3, 22C-4, 22C-5, 22C-6

Read the statute in the North Carolina General Statutes (North Carolina General Assembly): ncleg.gov.

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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