ARTICLE
Last Friday, Governor Hochul signed ECA-supported legislation (S3539/A4167) that relates to payment and retainage in construction contracts; authorizes contractors to invoice owners upon substantial completion of a project. This legislation amends the general business law by creating a definition of substantial completion in private construction contracts, and limiting the retainage held by private project owners to 5%. Under the current operation of law in New York, contractors and subcontractors are often required to wait a long period of time (sometimes over a year) after an owner occupies a construction contract to receive the retainage on a contract. This legislation will ensure that contractors and subcontractors are treated fairly by owners in construction contracts by defining substantial completion as how the term is negotiated or contemplated by the contract. The ambiguity in existing law relative to the definition of substantial completion and the release of retainage leads to unnecessary disputes, which can delay the payment of retainage by a year. This act takes effect immediately and applies to contracts entered into on and after last week's signing date of November 17, 2023.
Last Friday, Governor Hochul signed ECA-supported legislation (S3539/A4167) that relates to payment and retainage in construction contracts; authorizes contractors to invoice owners upon substantial completion of a project.
This legislation amends the general business law by creating a definition of substantial completion in private construction contracts, and limiting the retainage held by private project owners to 5%. Under the current operation of law in New York, contractors and subcontractors are often required to wait a long period of time (sometimes over a year) after an owner occupies a construction contract to receive the retainage on a contract.
This legislation will ensure that contractors and subcontractors are treated fairly by owners in construction contracts by defining substantial completion as how the term is negotiated or contemplated by the contract. The ambiguity in existing law relative to the definition of substantial completion and the release of retainage leads to unnecessary disputes, which can delay the payment of retainage by a year.
This act takes effect immediately and applies to contracts entered into on and after last week's signing date of November 17, 2023.