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

In Vermont, unless the contract says otherwise, an owner must pay a contractor’s interim or final invoice within 20 days after the end of the billing period or delivery of the invoice, whichever is later, and a contractor must pay each subcontractor within 7 days after receiving payment or the subcontractor’s invoice, whichever is later, with interest on any late payment. The owner must pay strictly according to the construction contract, and the 20-day rule applies where the contract does not set other terms. The 7-day subcontractor deadline applies notwithstanding any contrary agreement, and a contractor that does not accurately disclose the owner’s payment due date before the subcontract is signed must pay the subcontractor as though the owner had paid on the 20-day schedule. Late payments carry interest at the rate established by 12 V.S.A. § 2903(b), starting on the 21st day for an owner and the next day for a contractor, and if arbitration or litigation finds a party failed to follow the payment terms, it owes an added penalty of one percent per month on sums wrongfully withheld, and the substantially prevailing party is awarded reasonable attorney’s fees. Retainage must be paid within 30 days after final acceptance of the work and passed to subcontractors within seven days of receipt. The chapter covers both private and public owners and does not apply to a natural person buying materials to work on their own property. A written contract can set its own payment terms where the statute allows. This is 9 V.S.A. §§ 4001, 4002, 4003, 4005, 4007, 4009.

WhatVermont
Payment deadlineOwner pays within 20 days; sub within 7 days
Who this coversPrivate construction, not only public works

What the statute says

“Except as otherwise agreed, payment of interim and final invoices shall be due from the owner 20 days after end of billing period or 20 days after delivery of invoice, whichever is later.”

Quoted word for word from the section’s text.

Source

9 V.S.A. §§ 4001, 4002, 4003, 4005, 4007, 4009

Read the statute in the Vermont Statutes (Vermont General Assembly): legislature.vermont.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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