Ohio § 4113.61

§ 4113.61.

(A)(1) If a subcontractor or material supplier submits an application or request for payment

or an invoice for materials to a contractor in sufficient time to allow the contractor

to include the application, request, or invoice in the contractor's own pay request

submitted to an owner, the contractor, within ten calendar days after receipt of payment

from the owner for improvements to property, shall pay to the: (a) Subcontractor, an amount that is equal to the percentage of completion of the subcontractor's

contract allowed by the owner for the amount of labor or work performed; (b) Material supplier, an amount that is equal to all or that portion of the invoice

for materials which represents the materials furnished by the material supplier. The contractor may reduce the amount paid by any retainage provision contained in

the contract, invoice, or purchase order between the contractor and the subcontractor

or material supplier, and may withhold amounts that may be necessary to resolve disputed

liens or claims involving the work or labor performed or material furnished by the

subcontractor or material supplier. If the contractor fails to comply with division (A)(1) of this section, the contractor

shall pay the subcontractor or material supplier, in addition to the payment due,

interest in the amount of eighteen per cent per annum of the payment due, beginning

on the eleventh day following the receipt of payment from the owner and ending on

the date of full payment of the payment due plus interest to the subcontractor or

material supplier. (2) If a lower tier subcontractor or lower tier material supplier submits an application

or request for payment or an invoice for materials to a subcontractor, material supplier,

or other lower tier subcontractor or lower tier material supplier in sufficient time

to allow the subcontractor, material supplier, or other lower tier subcontractor or

lower tier material supplier to include the application, request, or invoice in the

subcontractor's, material supplier's, or other lower tier subcontractor's or lower

tier material supplier's own pay request submitted to a contractor, other subcontractor,

material supplier, lower tier subcontractor, or lower tier material supplier, the

subcontractor, material supplier, or other lower tier subcontractor or lower tier

material supplier, within ten calendar days after receipt of payment from the contractor,

other subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier for improvements to property, shall pay to the: (a) Lower tier subcontractor, an amount that is equal to the percentage of completion

of the lower tier subcontractor's contract allowed by the owner for the amount of

labor or work performed; (b) Lower tier material supplier, an amount that is equal to all or that portion of the

invoice for materials which represents the materials furnished by the lower tier material

supplier. The subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier may reduce the amount paid by any retainage provision contained in the contract,

invoice, or purchase order between the subcontractor, material supplier, lower tier

subcontractor, or lower tier material supplier and the lower tier subcontractor or

lower tier material supplier, and may withhold amounts that may be necessary to resolve

disputed liens or claims involving the work or labor performed or material furnished

by the lower tier subcontractor or lower tier material supplier. If the subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier fails to comply with division (A)(2) of this section, the subcontractor,

material supplier, lower tier subcontractor, or lower tier material supplier shall

pay the lower tier subcontractor or lower tier material supplier, in addition to the

payment due, interest in the amount of eighteen per cent per annum of the payment

due, beginning on the eleventh day following the receipt of payment from the contractor,

other subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier and ending on the date of full payment of the payment due plus interest to

the lower tier subcontractor or lower tier material supplier. (3) If a contractor receives any final retainage from the owner for improvements to property,

the contractor shall pay from that retainage each subcontractor and material supplier

the subcontractor's or material supplier's proportion of the retainage, within ten

calendar days after receipt of the retainage from the owner, or within the time period

provided in a contract, invoice, or purchase order between the contractor and the

subcontractor or material supplier, whichever time period is shorter, provided that

the contractor has determined that the subcontractor's or material supplier's work,

labor, and materials have been satisfactorily performed or furnished and that the

owner has approved the subcontractor's or material supplier's work, labor, and materials. If the contractor fails to pay a subcontractor or material supplier within the appropriate

time period, the contractor shall pay the subcontractor or material supplier, in addition

to the retainage due, interest in the amount of eighteen per cent per annum of the

retainage due, beginning on the eleventh day following the receipt of the retainage

from the owner and ending on the date of full payment of the retainage due plus interest

to the subcontractor or material supplier. (4) If a subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier receives any final retainage from the contractor or other subcontractor,

lower tier subcontractor, or lower tier material supplier for improvements to property,

the subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier shall pay from that retainage each lower tier subcontractor or lower tier

the lower tier subcontractor's or lower tier material supplier's proportion of the

retainage, within ten calendar days after receipt of payment from the contractor or

other subcontractor, lower tier subcontractor, or lower tier material supplier, or

within the time period provided in a contract, invoice, or purchase order between

the subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier and the lower tier subcontractor or lower tier material supplier, whichever

time period is shorter, provided that the subcontractor, material supplier, lower

tier subcontractor, or lower tier material supplier has determined that the lower

tier subcontractor's or lower tier material supplier's work, labor, and materials

have been satisfactorily performed or furnished and that the owner has approved the

lower tier subcontractor's or lower tier material supplier's work, labor, and materials. If the subcontractor, material supplier, lower tier subcontractor, or lower tier material

supplier fails to pay the lower tier subcontractor or lower tier material supplier

within the appropriate time period, the subcontractor, material supplier, lower tier

subcontractor, or lower tier material supplier shall pay the lower tier subcontractor

or lower tier material supplier, in addition to the retainage due, interest in the

amount of eighteen per cent per annum of the retainage due, beginning on the eleventh

day following the receipt of the retainage from the contractor or other subcontractor,

lower tier subcontractor, or lower tier material supplier and ending on the date of

full payment of the retainage due plus interest to the lower tier subcontractor or

lower tier material supplier. (5) A contractor, subcontractor, or lower tier subcontractor shall pay a laborer wages

due within ten days of payment of any application or request for payment or the receipt

of any retainage from an owner, contractor, subcontractor, or lower tier subcontractor. If the contractor, subcontractor, or lower tier subcontractor fails to pay the laborer

wages due within the appropriate time period, the contractor, subcontractor, or lower

tier subcontractor shall pay the laborer, in addition to the wages due, interest in

the amount of eighteen per cent per annum of the wages due, beginning on the eleventh

day following the receipt of payment from the owner, contractor, subcontractor, or

lower tier subcontractor and ending on the date of full payment of the wages due plus

interest to the laborer. (B)(1) If a contractor, subcontractor, material supplier, lower tier subcontractor, or lower

tier material supplier has not made payment in compliance with division (A)(1), (2),

(3), (4), or (5) of this section within thirty days after payment is due, a subcontractor,

material supplier, lower tier subcontractor, lower tier material supplier, or laborer

may file a civil action to recover the amount due plus the interest provided in those

divisions.  If the court finds in the civil action that a contractor, subcontractor, material

supplier, lower tier subcontractor, or lower tier material supplier has not made payment

in compliance with those divisions, the court shall award the interest specified in

those divisions, in addition to the amount due.  Except as provided in division (B)(3) of this section, the court shall award the

prevailing party reasonable attorney fees and court costs. (2) In making a determination to award attorney fees under division (B)(1) of this section,

the court shall consider all relevant factors, including but not limited to the following: (a) The presence or absence of good faith allegations or defenses asserted by the parties; (b) The proportion of the amount of recovery as it relates to the amount demanded; (c) The nature of the services rendered and the time expended in rendering the services. (3) The court shall not award attorney fees under division (B)(1) of this section if

the court determines, following a hearing on the payment of attorney fees, that the

payment of attorney fees to the prevailing party would be inequitable. (C) This section does not apply to any construction or improvement of any single-, two-,

or three-family detached dwelling houses. (D)(1) No provision of this section regarding entitlement to interest, attorney fees, or

court costs may be waived by agreement and any such term in any contract or agreement

is void and unenforceable as against public policy. (2) This section shall not be construed as impairing or affecting, in any way, the terms

and conditions of any contract, invoice, purchase order, or any other agreement between

a contractor and a subcontractor or a material supplier or between a subcontractor

and another subcontractor, a material supplier, a lower tier subcontractor, or a lower

tier material supplier, except that if such terms and conditions contain time periods

which are longer than any of the time periods specified in divisions (A)(1), (2),

(3), (4), and (5) of this section or interest at a percentage less than the interest

stated in those divisions, then the provisions of this section shall prevail over

such terms and conditions. (E) Notwithstanding the definition of lower tier material supplier in this section, a

person is not a lower tier material supplier unless the materials supplied by the

person are: (1) Furnished with the intent, as evidenced by the contract of sale, the delivery order,

delivery to the site, or by other evidence that the materials are to be used on a

particular structure or improvement; (2) Incorporated in the improvement or consumed as normal wastage in the course of the

improvement;  or (3) Specifically fabricated for incorporation in the improvement and not readily resalable

in the ordinary course of the fabricator's business even if not actually incorporated

in the improvement. (F) As used in this section: (1) “ Contractor ” means any person who undertakes to construct, alter, erect, improve, repair, demolish,

remove, dig, or drill any part of a structure or improvement under a contract with

an owner, a “construction manager” or “construction manager at risk” as those terms

are defined in section 9.33 of the Revised Code , or a “design-build firm” as that term is defined in section 153.65 of the Revised Code . (2) “ Laborer, ” “ material supplier, ” “ subcontractor, ” and “ wages ” have the same meanings as in section 1311.01 of the Revised Code . (3) “ Lower tier subcontractor ” means a subcontractor who is not in privity of contract with a contractor but is

in privity of contract with another subcontractor. (4) “ Lower tier material supplier ” means a material supplier who is not in privity of contract with a contractor but

is in privity of contract with another subcontractor or a material supplier. (5) “ Wages due ” means the wages due to a laborer as of the date a contractor or subcontractor receives

payment for any application or request for payment or retainage from any owner, contractor,

or subcontractor. (6) “ Owner ” includes the state, and a county, township, municipal corporation, school district,

or other political subdivision of the state, and any public agency, authority, board,

commission, instrumentality, or special district of or in the state or a county, township,

municipal corporation, school district, or other political subdivision of the state,

and any officer or agent thereof and relates to all the interests either legal or

equitable, which a person may have in the real estate upon which improvements are

made, including interests held by any person under contracts of purchase, whether

in writing or otherwise.