A05405 Summary:
| BILL NO | A05405 |
| SAME AS | SAME AS S05655 |
| SPONSOR | Hunter |
| COSPNSR | Stirpe |
| MLTSPNSR | |
| Amd §757, Gen Bus L | |
| 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. | |
A05405 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
TITLE OF BILL: An act to amend the general business law, in relation to void provisions in construction contracts PURPOSE OR GENERAL IDEA OF BILL: To ensure compliance with the statutory requirement of a maximum five percent retainage in construction contracts. SUMMARY OF PROVISIONS: Section 1: Amends section 757 of the general business law to add contract language requiring retainage in excess of five percent of a contract sum as a void provision in a construction contract. § 2. Provides an immediate effective date. JUSTIFICATION: Chapter 657 of the Laws of 2023 brought private construction contracts in line with state construction contracts by limiting the amount of retainage that contractors and subcontractors can hold from other subcontractors to a maximum of five percent. While it was the clear intent of the legislature to ensure that qualifying projects capped retainage at five percent, there are still many construction projects in which general contractors offer retainage at 10% or higher. By updating the general business law to render any clause requiring retainage in excess of five percent as void, we will ensure compliance with the spir- it of the law. PRIOR LEGISLATIVE HISTORY: This is a new bill. FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None EFFECTIVE DATE: This act shall take effect immediately and shall apply to contracts entered into on or after such effective date.