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Assembly Bill A5023

2011-2012 Legislative Session

Provides for a reasonable amount of construction contract sum to be deposited in a separate interest bearing escrow account with a third party escrow agent

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Archive: Last Bill Status - In Assembly Committee

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2011-A5023 (ACTIVE) - Details

See Senate Version of this Bill:
S3180
Current Committee:
Assembly Codes
Law Section:
General Business Law
Laws Affected:
Amd ยง756-c, Gen Bus L
Versions Introduced in Other Legislative Sessions:
2009-2010: A2279, S754
2013-2014: A529, S1217
2015-2016: A10276, S37
2017-2018: A1294, S5871
2019-2020: A488, S7352
2021-2022: A771, S26

2011-A5023 (ACTIVE) - Summary

Provides for a reasonable amount of construction contract sum to be deposited in a separate interest bearing escrow account with a third party escrow agent; provides further that the owner shall be subject to the payment of interest, in addition to the escrow interest, at the rate of one percent per month and the contractor or subcontractor shall be subject to payment of interest on the amount of retainage it holds at the rate of one percent per month.

2011-A5023 (ACTIVE) - Bill Text download pdf 

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 3180                                                  A. 5023

                       2011-2012 Regular Sessions

                      S E N A T E - A S S E M B L Y

                            February 10, 2011
                               ___________

IN  SENATE  --  Introduced by Sens. DeFRANCISCO, JOHNSON, O'MARA -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee on Consumer Protection

IN ASSEMBLY -- Introduced by M. of A. CUSICK -- Multi-Sponsored by -- M.
  of A. GUNTHER, HOOPER, MAGEE, PHEFFER -- read once and referred to the
  Committee on Economic Development

AN  ACT  to  amend the general business law, in relation to retention of
  construction contracts

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  756-c  of  the general business law, as added by
chapter 127 of the laws of 2002, is amended to read as follows:
  S 756-c. Retention. By mutual agreement of  the  relevant  parties  an
owner  may retain a reasonable amount of the contract sum as retainage[.
A]  AND FOR ANY CONSTRUCTION CONTRACTS, EXCLUDING CONSTRUCTION CONTRACTS
FINANCED BY A PUBLIC BENEFIT CORPORATION, SUCH RETAINAGE SHALL BE DEPOS-
ITED IN A SEPARATE INTEREST BEARING ESCROW ACCOUNT WITH  A  THIRD  PARTY
ESCROW  AGENT.  AS  OF  THE  TIME  OF  THE DEPOSIT OF THE RETAINAGE, THE
RETAINED FUNDS SHALL BECOME  THE  SOLE  AND  SEPARATE  PROPERTY  OF  THE
CONTRACTOR.  INTEREST  ON THE RETAINED FUNDS SHALL ACCRUE AT AN INTEREST
RATE AT LEAST EQUAL TO THE PREVAILING INTEREST RATE PAID ON DEPOSITS  BY
THE  ESCROW AGENT. ALSO, A contractor or subcontractor may [also] retain
a reasonable amount for retainage so long as the amount does not  exceed
the  actual  percentage  [retained]  DEPOSITED  IN  ESCROW by the owner.
[Retainage] THE ESCROWED RETAINAGE shall  be  released  by  the  [owner]
OWNER'S  WRITTEN  DIRECTION  TO THE ESCROW AGENT TO DELIVER THE ESCROWED
RETAINAGE to the contractor no later than thirty days  after  the  final
approval of the work under a construction contract. In the event that an
owner  fails to release THE ESCROWED retainage as required by this arti-
cle, or the contractor or subcontractor fails to release a proportionate

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05175-01-1

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