NY Lien L § 71 (2021)
2021 New York Laws LIE - Lien Article 3-A - Definition and Enforcement of Trusts 71 - Purpose of the Trust; "Trust Claims"; "beneficiaries."

§  71.  Purpose  of the trust; "trust claims"; "beneficiaries." 1. The trust assets of which an owner is trustee under subdivisions five (a) to five (f), inclusive, of section seventy of this chapter  shall  be  held and  applied for payment of the cost of improvement. The trust assets of which an owner is trustee under subdivision five (g) of section  seventy of  this  chapter  shall  be held and applied for payment of the cost of improvement and, in addition, for the  purposes  of  the  further  trust provided in section seventy-one-a of this chapter.   2.  The trust assets of which a contractor or subcontractor is trustee shall be held and applied for the following expenditures arising out  of the  improvement  of real property, including home improvement or public improvement  and  incurred  in  the  performance  of  his  contract   or subcontract, as the case may be:  (a)  payment  of  claims  of  subcontractors,  architects,  engineers, surveyors, laborers and materialmen;  (b) payment of the amount of taxes based on  payrolls  including  such persons  and  withheld or required to be withheld and taxes based on the purchase price or  value  of  materials  or  equipment  required  to  be installed  or  furnished  in  connection  with  the  performance  of the improvement;  (c)  payment  of  taxes   and   unemployment   insurance   and   other contributions  due  by reason of the employment out of which such claims arose;  (d) payment of any  benefits  or  wage  supplements,  or  the  amounts necessary  to  provide such benefits or furnish such supplements, to the extent that the trustee, as employer, is obligated  to  pay  or  provide such  benefits  or furnish such supplements by any agreement to which he is a party;  (e) payment of premiums on a surety bond or bonds filed  and  premiums on  insurance  accrued  during  the making of the improvement, including home improvement, or public improvement;  (f) payment to which the owner is entitled pursuant to the  provisions of section seventy-one-a of this chapter.   3.  (a) With respect to the trust of which an owner is trustee, "trust claims"  means  claims  of  contractors,   subcontractors,   architects, engineers,  surveyors,  laborers  and  materialmen  arising  out  of the improvement, for which the  owner  is  obligated,  and  also  means  any obligation  of the owner incurred in connection with the improvement for a payment or expenditure defined as cost of improvement.  (b) With respect to the trusts of which a contractor or  subcontractor is trustee, "trust claims" means claims arising at any time for payments for  which  the  trustee is authorized to use trust funds as provided in subdivision two of this section.  (c) No claim acquired by the trustee by assignment or otherwise  shall be a trust claim after it has been so acquired.   4.  Persons having claims for payment of amounts for which the trustee is authorized to use trust  assets  as  provided  in  this  section  are beneficiaries  of  the  trust  whether or not they have filed or had the right to file a notice of lien  as  provided  in  article  two  of  this chapter  or  shall  have  recovered  a judgment therefor. Where an owner becomes obligated to incur  an  expenditure  as  part  of  the  cost  of improvement, any person to whom he is so obligated is a beneficiary.   5. For the purposes of this article, every trust claim shall be deemed to  be  in  existence from the time of the making of the contract or the occurrence of the transaction out of which the claim arises and,  except as provided in section seventy-six and section seventy-seven, the rights of each member of the class of beneficiaries accrue at the making of the  contract  or  the  occurrence  of the transaction out of which the claim arises.