ECA recently sent a letter of support to state Legislative leaders supporting A6985/S5482, which is legislation that would amend 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. Retainage is a portion of the agreed-upon contract price that deliberately withheld until the work is “substantially complete”. The goal of retainage is to assure that a contractor or subcontractor will satisfy its obligations and complete a construction project. 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. Read ECA’s letter of support here.