Bill Text: NJ A2521 | 2016-2017 | Regular Session | Introduced
Bill Title: Concerns prompt payment of construction contracts.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2016-02-04 - Introduced, Referred to Assembly Labor Committee [A2521 Detail]
Download: New_Jersey-2016-A2521-Introduced.html
Sponsored by:
Assemblyman WAYNE P. DEANGELO
District 14 (Mercer and Middlesex)
SYNOPSIS
Concerns prompt payment of construction contracts.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the payment of construction contracts and supplementing chapter 44 of Title 2A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. All money paid by an owner to the prime contractor, all money paid by the prime contractor to the subcontractor, and all money paid by the subcontractor to the subsubcontractor, pursuant to the provisions of any contract for the improvement of real property shall constitute a trust fund in the hands of recipient. The recipient of the money held in trust pursuant to this section shall distribute the amount or amounts, as may be the case, as is due to subcontractors and material suppliers pursuant to the provisions of the contract in a timely manner, and money held in trust pursuant to this section shall not be appropriated for any other purpose. Nothing in this section shall be construed as requiring the payment of any amount that is being contested consistent with the provisions of section 2 of P.L.1991, c.133 (C.2A:30A-2), including, but not limited to, any amount that is being contested through an alternative dispute resolution proceeding, which proceeding includes, but is not limited to, a mediation or arbitration. Nothing in this section shall be construed as creating any claim or cause of action for the recovery of payments due under a contract for the improvement of real property, provided that all money held in trust has been distributed in accordance with the requirements of this section. A contract for the improvement of real property shall not contain any provision allowing any party to the contract to deviate from the imposition of a trust fund as provided in this subsection, and any provision of the contract to that effect shall be void and unenforceable.
2. This act shall take effect immediately.
STATEMENT
This bill requires, with regard to a contract for the improvement of real property, that all money paid by an owner to a prime contractor, by a prime contractor to a subcontractor, or by a subcontractor to a subsubcontractor, constitutes a trust fund in the hands of the recipient. The recipient of money held in trust pursuant to this bill must distribute amounts as may be due subcontractors and material suppliers in accordance with the contract, and may not be appropriated for any other purpose.
The bill provides that nothing contained therein is to be construed as requiring the payment of any amount that is being contested consistent with the provisions of section 2 of P.L.1991, c.133 (C.2A:30A-2), including, but not limited to, any amount that is being contested through an alternative dispute resolution proceeding.
Finally, the bill prohibits any contract for the improvement of real property to include a provision allowing any party to the contract to deviate from the imposition of a trust fund as required by the bill.
