§ 756-B — Remedies

New York § 756-B

• Jurisdiction: New York
• Law GBS: General Business
• Art. 35-E: Construction Contracts

Text

§ 756-b. Remedies. 1. (a) If any interim or final payment to a\ncontractor is delayed beyond the due date established in paragraph (a)\nof subdivision three of section seven hundred fifty-six-a of this\narticle, the owner shall pay the contractor interest beginning on the\nnext day at the rate of one percent per month or fraction of a month on\nthe unpaid balance, or at a higher rate consistent with the construction\ncontract.\n (b) Notwithstanding any contrary agreement, if any interim or final\npayment to a subcontractor is delayed beyond the due date established in\nparagraph (b) of subdivision three of section seven hundred fifty-six-a\nof this article the contractor or subcontractor shall pay its\nsubcontractor interest, beginning on the next day, at the rate of one\npercent a month or fraction of a month on the unpaid balance, or at a\nhigher rate consistent with the construction contract.\n 2. (a) (i) If an owner fails to approve or disapprove an invoice\nwithin the time limits established in subparagraph (i) of paragraph (a)\nof subdivision two of section seven hundred fifty-six-a of this article,\nor to pay the contractor the undisputed invoice amount within the time\nlimits provided by paragraph (a) of subdivision three of section seven\nhundred fifty-six-a of this article, the contractor may suspend\ncontractually required performance, only after providing the owner\nwritten notice and an opportunity to cure consistent with subparagraph\n(ii) of this paragraph.\n (ii) A contractor intending to suspend performance on the construction\ncontract for failure of the owner to make timely payments or approvals\nwithin the time limits provided by this article must provide the owner\nwritten notice at least ten calendar days before the contractor's\nintended suspension. Such notice shall:\n (A) inform the owner that payment for undisputed invoice amounts have\nnot been received; and\n (B) state the intent of the contractor to suspend performance for\nnon-payment.\nIf after the tenth calendar day following written notice the owner has\nnot cured the deficiency, the contractor may suspend performance.\n (iii) A contractor shall not be deemed in breach of the construction\ncontract for suspending performance pursuant to this section.\n (b)(i) A subcontractor may suspend contractually required performance\nif any or all of the occurrences outlined in clauses (A), (B) and (C) of\nthis subparagraph occur and only after providing written notice and an\nopportunity to cure consistent with subparagraph (ii) of this paragraph:\n (A) If an owner fails to make timely payments for undisputed invoices\nwithin the time limits established by subdivision three of section seven\nhundred fifty-six-a of this article for the subcontractor's work and the\ncontractor also fails to pay the subcontractor for the approved work;\n (B) If an owner pays the contractor within the time limits established\nby subdivision three of section seven hundred fifty-six-a of this\narticle for undisputed invoices for work performed by the subcontractor\nbut the contractor fails to make payment to the subcontractor within the\ntime frames established by this article for the subcontractor's work;\n (C) If an owner fails to approve or disapprove a portion of\ncontractor's invoice for work performed by the subcontractor within the\ntime limits established in paragraph (a) of subdivision two of section\nseven hundred fifty-six-a of this article;\n (D) If a contractor or subcontractor fails to approve or disapprove a\nsubcontractor's invoice within the time limits established in paragraph\n(b) of subdivision three of section seven hundred fifty-six-a of this\narticle; or\n (E) If an owner fails to approve portions of the contractors' billing\nfor work performed by the subcontractor within the time limits\nestablished by this article and the reasons for such failure are not the\nfault of or directly related to the subcontractor's work.\n (ii) A subcontractor intending to suspend performance for failure to\nreceive timely payments within the time limits established pursuant to\nthis article must provide both the owner and the contractor written\nnotice at least ten calendar days before the subcontractor's intended\nsuspension. Such notice shall:\n (A) inform the owner and the contractor that payment for undisputed\nbilling amounts have not been received; and\n (B) state the intent of the contractor to suspend performance for\nnon-payment.\n If after the tenth calendar day following written notice either the\nowner or the contractor has not cured the deficiency, the subcontractor\nmay suspend performance and/or attempt to resolve in compliance with\nsubdivision three of this section.\n (iii) A subcontractor shall not be deemed in breach of the\nconstruction contract for suspending performance pursuant to this\nsection.\n (iv) (A) A contractor or subcontractor that suspends performance as\nprovided in this section shall not be required to furnish further labor,\nmaterials or services until the contractor or subcontractor is paid the\nundisputed invoice amount at the time period for completion as provided\nin the construction contract, or a final determination has been made in\ncompliance with subdivision three of this section and complied with. All\nof the time frames established within this section shall be extended for\nthe length of time performance was suspended. Payment of documented\nactual costs incurred for re-mobilization resulting from suspension\nshall be negotiated between the parties.\n (B) In the event of suspension of a construction contract, as provided\nin this article, all materials, equipment, tools, construction equipment\nand machinery located at the job site shall remain the sole and\nexclusive property of the contractor or subcontractor and shall be\nremoved from the job site, if necessary, within a reasonable period of\ntime. Access to the contractor's or subcontractor's property shall not\nbe unreasonably withheld.\n 3. (a) Upon receipt of written notice of a complaint (i) that an owner\nhas violated the provisions of this article; (ii) that a contractor has\nviolated the provisions of this article; (iii) where a contractor\nalleges a subcontractor has violated the provisions of this article;\n(iv) where a subcontractor alleges a contractor has violated the\nprovisions of this article; (v) where a subcontractor alleges that\nanother subcontractor has violated the provisions of this article; (vi)\nwhere a contractor or subcontractor alleges a material supplier has\nviolated the provisions of this article; or (vii) where a material\nsupplier alleges a contractor or subcontractor has violated the\nprovisions of this article; the parties shall attempt to resolve the\nmatter giving rise to such complaint.\n (b) The written notice required under this section shall be delivered\nat or sent by any means that provides written, third-party verification\nof delivery to the last business address known to the party giving\nnotice.\n (c) If efforts to resolve such matter to the satisfaction of all\nparties are unsuccessful, the aggrieved party may refer the matter, not\nless than fifteen days of the receipt of third party verification of\ndelivery of the complaint, to the American Arbitration Association for\nan expedited arbitration pursuant to the Rules of the American\nArbitration Association.\n (d) Upon conclusion of the arbitration proceedings, the arbitrator\nshall submit to the parties his or her opinion and award regarding the\nalleged violation.\n (e) The award of the arbitrator shall be final and may only be vacated\nor modified as provided in article seventy-five of the civil practice\nlaw and rules upon an application made within the time provided by\nsection seventy-five hundred two of the civil practice law and rules.\n