There are several “prompt payment” statutes in Arizona, the most recent of which sets forth law as to timely payment on private projects. On behalf of their clients, Palecek & Palecek will help ensure that a Contractor can legally “Stop Work” within the appropriate statutory guidelines. There are laws in Arizona that protect a Contractor when it lawfully “stops work.” Such laws can protect a Contractor from being terminated for such work stoppage.
The idea behind the statutes is that an Owner or General Contractor has no right to withhold a Contractor’s money for work performed in a timely and workmanlike manner when such money has already been paid or “deemed certified / approved.”
For a Subcontractor, the most important criteria is proof that the General Contractor has received the payment. This can be frustrating for subcontractors because the general contractor can simply not be applying for funds timely or the Owner is withholding payment from the general contractor for whatever reason. There are arguments that a Subcontractor can make when a general contractor has failed to receive payment from the Owner because of the fault of the general contractor. Generally speaking, it is a breach of the subcontract for a general contractor to cause the Owner to withhold monthly payment. Consult your legal counsel for the details because it is very fact-specific.