Voids provisions in construction contracts requiring retainage as expressly provided for by section seven hundred fifty-six-c of the general business law in an amount exceeding five percent of the contract sum.
Summary
Bill S05655 seeks to amend the general business law of New York by adding a new provision that voids any clause in construction contracts that requires retainage exceeding five percent of the contract sum. Retainage is a common practice in construction contracts where a portion of the payment is withheld until the completion of the project to ensure that the contractor fulfills their obligations. This bill aims to protect contractors from excessive retainage practices that can adversely affect their cash flow and financial stability.
Impact
If enacted, this bill will directly impact construction contracts within New York State by limiting the amount of retainage that can be withheld to a maximum of five percent. This change is expected to provide greater financial security for contractors, particularly smaller firms that may struggle with cash flow issues when large sums are retained. The amendment will also require existing contracts that stipulate higher retainage amounts to be revised to comply with the new law, thereby affecting the contractual agreements between parties involved in construction projects.
Sentiment
The general sentiment surrounding Bill S05655 appears to be supportive among contractors and construction industry advocates, who argue that the current retainage practices can be detrimental to their operations. However, there may be concerns from some stakeholders about the potential impact on project oversight and quality assurance, as retainage is often used as leverage to ensure completion of work to satisfaction.
Contention
Notable points of contention may arise from construction project owners and larger contractors who argue that retainage serves as a necessary tool to ensure project completion and quality. They may express concerns that limiting retainage could lead to issues with accountability and project management, particularly in larger or more complex construction projects. The balance between protecting contractors' cash flow and ensuring project quality is likely to be a key point of debate.
Same As
Voids provisions in construction contracts requiring retainage as expressly provided for by section seven hundred fifty-six-c of the general business law in an amount exceeding five percent of the contract sum.
Voids provisions in construction contracts requiring retainage as expressly provided for by section seven hundred fifty-six-c of the general business law in an amount exceeding five percent of the contract sum.
Requires state contracts with construction firms reserve a percent of such contract to soft cost spending towards small businesses located near the construction site; defines what qualifies as soft cost spending.
Limits amount of payment that State agency as property owner may withhold from certain contractors on State construction contracts to two percent of amount due.
Increases the interest rate for late payments due on construction contracts from one to two percent; includes a change order as part of the definition of construction contract; defines change order; repeals exceptions for lower Manhattan construction contracts.