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
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
On November 17, 2023, Governor Kathy Hochul signed a bill into law amending Sections 756-a and 756-c of the New York State Prompt Payment Act (N.Y. Gen. Bus. Law §756 (McKinney 2009)) governing restrictions on retainage and...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
On Friday, November 17, 2023, Governor Hochul signed into law a bill which limits the retainage held on construction contracts for private improvements to 5% of the contract price from inception of the project – this applies...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
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
Earlier this month, our firm was well-represented at the 35th Annual Construction Law Conference in San Antonio, Texas. As always, the conference presented great opportunities to visit with colleagues and other construction...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
As everyone in the construction industry knows, timely payment is essential. However, the payment process can be complicated, with unexpected issues throwing plans off course. In their second webinar of 2021, Cohen...more
The Tennessee Construction Industry Payment Protection Act was signed into law on June 22. The Act addresses or reallocates certain risks associated with non-payment on construction projects under Tennessee’s Prompt Pay Act...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
Effective August 20, 2019, Illinois law provides that a maximum of 10 percent retainage may be withheld from payments under private construction contracts and, after the contract is one-half complete, retainage must be...more
In Vic Davis Construction, Inc. v. Lauren Engineers & Constructors, Inc., the Tennessee Court of Appeals approved a contractor’s use of closeout costs to “holdback” 5% of the contract price without complying with the...more
Illinois Governor Bruce Rauner vetoed Senate Bill 3052, commonly known as the retainage reform bill, on August 24, 2018. This bill was drafted and supported by the subcontractors lobby, was only lukewarmly embraced by the...more
The most ignored set of laws in Tennessee that impact commercial developers and their lenders are the construction “retainage” laws. Typically during a commercial project, once a draw is approved/funded by the lender, the...more
Minnesota has modified its prompt payment and retainage statute (Minn. Stat. 337.10). These revisions mean that many owners, contractors and subcontractors will have to revise the payment provisions of their construction...more
A new law is now in effect for contracts executed after November 6, 2014, that not only affects the amount of retainage that a construction stakeholder may withhold but also mandates processes for project completion. In...more
Massachusetts enacted a new retainage law that will require owners, prime contractors and subcontractors to pay retainage according to the law’s terms on a construction contract if... ...more