Alabama prompt payment

Who and what this applies to

Private construction within Alabama Code chapter 8-29. Section 8-29-7 excludes residential homebuilders, residential improvements of 16 or fewer units, contracts/subcontracts/sub-subcontracts of $10,000 or less, and state or local government contracts.

The rules

• For performance and requests satisfying §8-29-3(a), the owner pays according to the payment terms specified in the contract documents, or within 30 days after receipt if no terms are agreed. Source
• Sections 8-29-3(b)–(c) address agreed downstream terms and a seven-day receipt-based default. Section 8-29-3(e) separately requires a contractor receiving owner payment to pass each subcontractor its attributable share, including attributable interest, by the seventh day after receipt. Source
• Noncompliant late payment bears interest of 1% per month on the unpaid balance due. Statutory and contractual grounds for withholding remain relevant. Source

Deadlines

Owner default: 30 days after receipt; downstream receipt-based rule: seven days, as described.

Primary sources

• Ala. Code §8-29-3(a)–(e), (n)
• Ala. Code §8-29-7 exclusions

Sources reviewed 2026-09-30. This guide covers the projects and rules stated above.

Back to Alabama contractor law · Prompt Payment topic guide.