This chapter does not prevent the owner from reasonably withholding payment or a portion of a payment to the prime contractor, as long as the withholding is in accordance with the written contract between the owner and the prime contractor. The owner may also withhold a reasonable amount of retainage as specified in the written contract between the owner and the prime contractor, as long as the retainage amount does not exceed five percent (5%) of the amount of the contract.
Tenn. Code Ann. § 66-34-203
Withholding of payment or retainage by owner
Known as the Prompt Pay Act
The act spans §§ 66-34-101 to 66-34-704 (22 sections).
Applied in 1 court decision — leading case Madden Phillips Construction, Inc. v. GGAT Development Corp. (2009)
Most recently applied in Madden Phillips Construction, Inc. v. GGAT Development Corp. (September 2009)
Acts 1991, ch. 45, § 1; 2007, ch. 201, § 4; 2020, ch. 749, § 20.
Current official text: Tennessee Code (LexisNexis). Digitized from the UniCourt Code Improvement Commission public-domain capture. Reproduced from public-domain Tennessee statutes; confirm against the official source for the current text. Not legal advice.