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

In Tennessee, an owner must pay a prime contractor the full amount earned, on the contract’s payment schedule and within 30 days after a timely application for payment, a prime contractor must pay a subcontractor within 30 days after the subcontractor’s timely application, and a late payment carries the contract’s interest rate or 1.5% a month. The owner may hold back only the amounts the Prompt Pay Act allows, and an architect’s or engineer’s failure to review an application does not excuse the owner from paying. A prime contractor’s payment to a subcontractor is subject to any condition-precedent payment clause in their contract, and the prime contractor must pass on the subcontractor’s share of any interest it receives. Interest runs from the date the payment was due until the date it is paid. The Prompt Pay Act does not apply to contracts for building, or home improvement to, a residence of one to four single-family units. A written contract can set its own payment terms where the statute allows. This is Tenn. Code §§ 66-34-202, 66-34-302, 66-34-601, 66-34-702.

WhatTennessee
Payment deadlineOwner pays within 30 days of an application; 1.5% a month
Who this coversPrivate construction, not only public works

What the statute says

“The payment must be made in accordance with the schedule for payments established within the contract and within thirty (30) days after application for payment is timely submitted by the prime contractor to the owner, in accordance with the schedule.”

Quoted word for word from the section’s text.

Source

Tenn. Code §§ 66-34-202, 66-34-302, 66-34-601, 66-34-702

Read the statute in the Tennessee Code (Tennessee General Assembly): capitol.tn.gov.

The linked sections open Justia’s free copy of the code, because the state’s own site has no stable address for each section.

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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