Bill Text: NY S03539 | 2023-2024 | General Assembly | Introduced

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Bill Title: Relates to payment and retainage in construction contracts; authorizes contractors to invoice owners upon substantial completion of a project.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2023-11-17 - SIGNED CHAP.657 [S03539 Detail]

Download: New_York-2023-S03539-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          3539

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 31, 2023
                                       ___________

        Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Consumer Protection

        AN ACT to amend the general business law, in  relation  to  payment  and
          retainage in construction contracts

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The opening paragraph of paragraph (a) of subdivision 2  of
     2  section  756-a of the general business law, as amended by chapter 417 of
     3  the laws of 2009, is amended to read as follows:
     4    A contractor shall be  entitled  to  invoice  the  owner  for  interim
     5  payments at the end of the billing cycle. A contractor shall be entitled
     6  to  submit  a final invoice for payment in full [upon the performance of
     7  all the  contractor's  obligation  under  the  contract]  upon  reaching
     8  substantial completion, as such term is defined in the contract or as it
     9  is contemplated by the terms of the contract.
    10    §  2.  Section  756-c of the general business law, as added by chapter
    11  127 of the laws of 2002, is amended to read as follows:
    12    § 756-c. Retention. By mutual agreement of  the  relevant  parties  an
    13  owner  may  retain [a reasonable amount] no more than five per centum of
    14  the contract sum as retainage. A contractor or  subcontractor  may  also
    15  retain  [a reasonable amount] no more than five per centum for retainage
    16  [so long as the amount does not] and in no case shall  retainage  exceed
    17  the actual percentage retained by the owner. Retainage shall be released
    18  by the owner to the contractor no later than thirty days after the final
    19  approval of the work under a construction contract. In the event that an
    20  owner  fails  to  release  retainage as required by this article, or the
    21  contractor or subcontractor fails to release a proportionate  amount  of
    22  retainage  to  the  relevant parties after receipt of retainage from the
    23  owner, the owner, contractor, or subcontractor,  as  the  case  may  be,
    24  shall  be  subject to the payment of interest at the rate of one percent
    25  per month on the date retention was due and owing.
    26    § 3. This act  shall  take  effect  immediately  and  shall  apply  to
    27  contracts entered into on or after such effective date.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07647-01-3