The Law on Payment of Contractors and Subcontractors applies to mixed-use projects involving both residential and non-residential or commercial units. – Real Estate and Construction

United States: The Law on Payment of Contractors and Subcontractors applies to mixed-use projects involving both residential and non-residential or commercial units.

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The Law on Payment of Contractors and Subcontractors (CASPA), 73 Pa. Stat. Anne. §§ 501 et seq., Applies to construction contracts, with the exception of contracts for public works projects and construction contracts for the improvement of immovable property consisting only of six housing units or less in under construction simultaneously. To be entitled to relief under CASPA, a party must first establish a contractual right to payment under a written or oral construction contract and a subsequent breach of that construction contract. In the circumstances listed in CASPA, an owner, contractor or subcontractor who does not pay to a contractor or subcontractor in accordance with the law may be held liable for interest, penalties, attorney fees. and litigation costs.

The project involved in El-Gharbaoui was a multipurpose project that included a church, a day care center and two residential apartments. Despite the inapplicability of CASPA to projects involving the improvement of six or fewer residential units that are under construction simultaneously, the court found that CASPA applied to the mixed-use project at issue in
El-Gharbaoui because “the objective of CASPA would be thwarted if the law were found to be inapplicable to construction contracts which concerned commercial structures, including a mixed-use development, simply because the construction contract involved improvements on the same land or the same building with six or fewer residential units. “

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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