New York State Senate Bill S3539, revised on May 25, 2023, and sponsored by Senator Breslin, addresses the issue of payment and retainage in construction contracts. The bill’s key provisions include:
- Amendment of Payment Terms: It amends section 756-a of the general business law to condition the release of retainage from the contractor upon achieving the “substantial completion” terms described in the contract.
- Retainage Limitations: It amends section 756-c to cap retainage at a maximum of 5% of the contract sum and establishes a maximum period of thirty days post-final approval for the release of retainage.
- Objective: The bill aims to reduce delays in the release of retainage on private construction jobs that meet “substantial completion” requirements, addressing long waiting times and disputes that often burden contractors and subcontractors, including Minority and Women Owned businesses.
- Implementation Details: The bill mandates the specification of substantial completion in private construction contracts and reforms the payment process of retainage to reduce disputes and delays between owners and contractors.
- Prior Legislative History and Fiscal Implications: The bill follows similar legislative efforts in previous years, with no fiscal implications for state and local governments.
- Effective Date: The act becomes effective immediately and applies to contracts entered into after its effective date
If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440
