Oregon and Washington now allow contractors and subcontractors to avoid cash retainage by posting a surety bond with the owner, on both public and private/commercial construction projects. The process is similar in both...more
Proposed bills in the New York State Assembly and Senate would prohibit the retention of any amount of payment due and owing for materials delivered and accepted for public and private construction projects. The identical...more
Construction contracts for private projects will soon be subject to a new retainage law in Mississippi. On April 19, 2024, Gov. Tate Reeves approved SB 2762 into law, and after July 1, 2024, most construction contracts on...more
On November 17, 2023, Governor Kathy Hochul signed Senate Bill 3539, amending Section 756-a and Section 756-c of the New York General Business Law (more commonly referred to as the Prompt Payment Act) to set the maximum...more
New York has made changes to its Prompt Payment Act (N.Y. Gen. Bus. Law §756) Legislation, which Gov. Kathy Hochul signed into law on November 17, 2023, provides that: • retainage on private construction projects is capped...more
New York’s Prompt Pay Act, which sets the standards that govern private commercial construction contracts exceeding $150,000, was amended effective November 17, 2023. The Amendment known as Senate Bill 3539 provides two...more
On November 17, 2023, Governor Hochul signed a bill placing significant restrictions on the amount of retainage that can be withheld from contractors and subcontractors, and permitting the earlier submission of final billing...more
A newly-enacted amendment to the New York General Business Law is designed to reduce delays in final payments to contractors, limit the amount of the contract sum (“retainage”) that can be withheld by and revises the...more
No matter your tier in the construction contracting chain, understanding the nuanced rules and procedures about retainage, back charges, and other payment withholdings is critical to managing cash flow and protecting your...more
On May 9, 2023, Washington Governor Jay Inslee signed into law Senate Bill (SB) 5528, which limits the percentage of retainage withheld from contractors on private construction projects in Washington....more
New private project retention cap matches that for public construction projects and takes effect July 23 - This year, the Washington State Legislature approved a cap on retainage for private projects. The stated purpose of...more
Depending on the state, retainage often provides an owner a security interest in unpaid funds to help cover completion costs or other damages that may later occur by withholding a certain portion (typically 5-10%) of contract...more
Here’s the Scenario: Try explaining the concept of “retainage” to a businessperson unfamiliar with the construction industry at your next holiday party. Here’s the typical response as she spits out her eggnog: “Wait a minute:...more
One of the bills of interest to construction professions in the 2021-2022 session of the Georgia General Assembly, Senate Bill 438, recently passed and alters how much retainage is withheld on public construction projects. ...more
Legislation about retainage has become common place as many states have adopted different limitations, requirements, and schemes. A recent case in Tennessee is a good reminder that you must pay attention to all of the...more
On June 30, the Supreme Court of Tennessee issued an opinion interpreting the retainage provisions in Tennessee’s Prompt Pay Act (the Act). The opinion has significant implications for construction projects across Tennessee....more
Statutory Retainage- Texas law obligates construction owners to withhold 10% of the value of the work during the course of a project and for 30 days after final completion. This is generally known as statutory retainage....more
After a number of controversial bills proposed from various industry groups over the last few years, the Tennessee construction community came together in 2020 to push through legislation intended to protect members of the...more
This Construction Law Alert highlights some of the significant Tennessee state and federal decisions affecting the construction industry from the past year. Holdback Payments Are Not Retainage - Tennessee’s Prompt Pay...more
Dear YouDig?, We are finishing up a contract to start a piece of a big project. The owner is pushing for a 10 percent retainer of all of our payments. It does not seem fair as most of our costs are front loaded and most of...more
Given the amount of leftover Halloween candy in our house, you bet that I can make some deals with my kiddos: “If you do this, I will give you some candy” … or … “If you don’t stop doing this … I won’t give you any candy.”...more
The Illinois legislature recently passed a law modifying the Contractor Prompt Payment Act, impacting retainage on all private projects (except residential projects involving twelve units or less). The law sets the ceiling...more
The Illinois Contractor Prompt Payment Act, 815 ILCS 603/1, et seq. (the “Act”) was first enacted in 2007 and designed to safeguard contractors and subcontractors on private projects by providing a mechanism to expedite...more
On July 2, 2019, the United States Bankruptcy Court for the Southern District of Mississippi sent a clear message to secured lenders that their security interests on a contractor's account receivables, even if perfected, will...more
In the 2019 session, the Minnesota Legislature introduced a number of sweeping changes to statutes affecting individuals in the construction industry. On August 1, 2019, a number of those changes will go into effect. These...more