A.R.S. 32-1182: Arizona Prompt Pay Rules for Owner Progress Payments

Once your contractor bills you, the billing is treated as approved after 14 days unless you object in writing, and you then have 7 days to pay. That is the clock A.R.S. 32-1182, Arizona's Prompt Pay Act for homeowners, sets. Miss the deadline and interest runs at 1.5 percent a month. This page explains the timing and what it means for your draws.

What this statute says

The Prompt Pay Act fixes default deadlines so a contractor is not left waiting on payment without recourse. Two clocks run in sequence. First, a billing or estimate is automatically certified and approved 14 days after the owner gets it, unless the owner sends a written objection:

A billing or estimate is deemed certified and approved fourteen days after the owner receives the billing or estimate unless... the owner... prepares and issues in writing a statement detailing those items in the billing or estimate that are not approved.

Second, once a billing is certified and approved, payment is due within 7 days:

The owner shall make progress payments to the contractor... within seven days after the date the billing or estimate is certified and approved.

If the owner pays late, interest runs against the unpaid balance:

the owner shall pay the contractor interest at the rate of one and one-half per cent a month or fraction of a month on the unpaid balance, or at a higher rate as the parties... agree.

The 7-day timeline can be extended only if the contract clearly says so and the longer term is noted on the plans. The 1.5 percent monthly rate works out to about 18 percent a year.

What it means for your home build

This statute sets the rhythm for paying a builder on a custom home. For example, on a $700,000 Cave Creek build, your contractor submits a $90,000 framing draw. You have 14 days to review it; if you find a problem, you must put your specific objection in writing within that window. If you say nothing, the draw is deemed approved on day 14, and the $90,000 is due 7 days later. Pay on day 25 and you owe 1.5 percent interest on top.

The practical takeaway: do not sit on a draw. If part of it is wrong, object in writing and itemize what you dispute, because silence approves the whole thing. This timing is exactly why your draw schedule should match real construction milestones, so each billing lines up with completed work and you are not paying ahead. If scope changed, the billing should reflect a signed change order , not a surprise.

How this connects to other rules

This section is the owner side of Arizona's prompt-payment chain. It pairs with A.R.S. 32-1185, which lets a contractor suspend or end the job for nonpayment, and with the contractor-to-subcontractor timing rules that follow it. The payment stages it governs are the same ones your contract must spell out under A.R.S. 32-1158, item 8. To line all this up with your loan, see construction loan draw schedules explained , and for the agreement itself, see what to include in a custom home contract and cost-plus vs fixed-price home contracts .

Full text and source

Read the current section, including the exact certification and notice rules, on the legislature's site: View A.R.S. 32-1182 on azleg.gov .

How the rule applies to a specific payment depends on the facts, so confirm details with a qualified professional before relying on it.