Late Fees on Invoices in New York
What New York contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
16% per annum (maximum for private contracts); 9% default
Small Claims Limit
$10,000
Small Claims Court (Civil Court or City Court)
Mechanics Lien Deadline
8 months from last furnishing (NYC: 4 months)
New York Prompt Payment Act
New York Prompt Payment Act, N.Y. Gen. Bus. Law § 756-a et seq.
New York requires payment within 30 days for state construction contracts. Private construction follows the Lien Law for enforcement.
Late fee rules for New York invoices
New York enforces contractual late fees up to the usury limit of 16% per annum. Fees that exceed this may be voided as usurious.
New York's legal interest rate is 9% per annum. Private contracts can specify up to 16%. Civil usury limits apply above 16%.
Important disclaimer
This page provides general information about New York late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in New York.
Demand letters and mechanics liens in New York
New York does not require a demand letter for mechanics liens, but serving one demonstrates good faith and often resolves the dispute.
Mechanics lien deadline: 8 months from last furnishing (NYC: 4 months). A Notice of Lien must be filed with the county clerk.
Sample late fee clause for New York invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (16% per annum (maximum for private contracts); 9% default maximum per New York law) will be applied to all balances remaining unpaid after the due date. Pursuant to the New York Lien Law and General Business Law § 756-a, the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $10,000 in Small Claims Court (Civil Court or City Court)), and referral to collections.”
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Start Free TrialFrequently asked questions — New York
What is the maximum late fee I can charge on an invoice in New York?▾
In New York, New York's legal interest rate is 9% per annum. Private contracts can specify up to 16%. Civil usury limits apply above 16%. Always disclose late fee terms in your contract or invoice before work begins.
Does New York have a prompt payment act?▾
Yes. New York requires payment within 30 days for state construction contracts. Private construction follows the Lien Law for enforcement.
What is the small claims court limit in New York?▾
The small claims court limit in New York is $10,000. Claims are filed in Small Claims Court (Civil Court or City Court). You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in New York?▾
In New York, 8 months from last furnishing (NYC: 4 months). A Notice of Lien must be filed with the county clerk.
Do I need to send a demand letter before filing a lien in New York?▾
New York does not require a demand letter for mechanics liens, but serving one demonstrates good faith and often resolves the dispute.