Section 512 - Penalty and attorney fee(a) Penalty for failure to comply with act.-- (1) If arbitration or litigation is commenced to recover payment due under this act and it is determined that an owner, contractor or subcontractor has failed to comply with the payment terms of this act, the arbitrator or court shall award, in addition to all other damages due, a penalty equal to 1% per month of the amount that was wrongfully withheld.(2) An amount shall not be deemed to have been wrongfully withheld if all of the following apply: (i) The amount bears a reasonable relation to the value of any claim held in good faith by the owner, contractor or subcontractor against whom the contractor or subcontractor is seeking to recover payment.(ii) The claim holder complies with section 6 or 11.(b) Award of attorney fee and expenses.--Notwithstanding any agreement to the contrary, the substantially prevailing party in any proceeding to recover any payment under this act shall be awarded a reasonable attorney fee in an amount to be determined by the court or arbitrator, together with expenses.Amended by P.L. TBD 2018 No. 27, § 4, eff. 10/10/2018.1994, Feb. 17, P.L. 73, No. 7, § 12, effective in 60 days.