2023 New York Laws › GBS - General Business › Article 35-E - Construction Contracts › 756-B - Remedies.

§  756-b.  Remedies.  1.  (a)  If  any  interim  or final payment to a
contractor is delayed beyond the due date established in  paragraph  (a)
of  subdivision  three  of  section  seven  hundred  fifty-six-a of this
article, the owner shall pay the contractor interest  beginning  on  the
next  day at the rate of one percent per month or fraction of a month on
the unpaid balance, or at a higher rate consistent with the construction
contract.
(b) Notwithstanding any contrary agreement, if any  interim  or  final
payment to a subcontractor is delayed beyond the due date established in
paragraph  (b) of subdivision three of section seven hundred fifty-six-a
of  this  article  the  contractor  or  subcontractor  shall   pay   its
subcontractor  interest,  beginning  on the next day, at the rate of one
percent a month or fraction of a month on the unpaid balance,  or  at  a
higher rate consistent with the construction contract.
2.  (a)  (i)  If  an  owner  fails to approve or disapprove an invoice
within the time limits established in subparagraph (i) of paragraph  (a)
of subdivision two of section seven hundred fifty-six-a of this article,
or  to  pay the contractor the undisputed invoice amount within the time
limits provided by paragraph (a) of subdivision three of  section  seven
hundred   fifty-six-a  of  this  article,  the  contractor  may  suspend
contractually required  performance,  only  after  providing  the  owner
written  notice  and an opportunity to cure consistent with subparagraph
(ii) of this paragraph.
(ii) A contractor intending to suspend performance on the construction
contract for failure of the owner to make timely payments  or  approvals
within  the  time limits provided by this article must provide the owner
written notice at  least  ten  calendar  days  before  the  contractor's
intended suspension. Such notice shall:
(A)  inform the owner that payment for undisputed invoice amounts have
not been received; and
(B) state the intent of the  contractor  to  suspend  performance  for
non-payment.
If  after  the tenth calendar day following written notice the owner has
not cured the deficiency, the contractor may suspend performance.
(iii) A contractor shall not be deemed in breach of  the  construction
contract for suspending performance pursuant to this section.
(b)(i)  A subcontractor may suspend contractually required performance
if any or all of the occurrences outlined in clauses (A), (B) and (C) of
this subparagraph occur and only after providing written notice  and  an
opportunity to cure consistent with subparagraph (ii) of this paragraph:
(A)  If an owner fails to make timely payments for undisputed invoices
within the time limits established by subdivision three of section seven
hundred fifty-six-a of this article for the subcontractor's work and the
contractor also fails to pay the subcontractor for the approved work;
(B) If an owner pays the contractor within the time limits established
by subdivision three  of  section  seven  hundred  fifty-six-a  of  this
article  for undisputed invoices for work performed by the subcontractor
but the contractor fails to make payment to the subcontractor within the
time frames established by this article for the subcontractor's work;
(C)  If  an  owner  fails  to  approve  or  disapprove  a  portion  of
contractor's  invoice for work performed by the subcontractor within the
time limits established in paragraph (a) of subdivision two  of  section
seven hundred fifty-six-a of this article;
(D)  If a contractor or subcontractor fails to approve or disapprove a
subcontractor's invoice within the time limits established in  paragraph
(b)  of  subdivision  three of section seven hundred fifty-six-a of this
article; or
(E) If an owner fails to approve portions of the contractors'  billing
for   work  performed  by  the  subcontractor  within  the  time  limits
established by this article and the reasons for such failure are not the
fault of or directly related to the subcontractor's work.
(ii)  A  subcontractor intending to suspend performance for failure to
receive timely payments within the time limits established  pursuant  to
this  article  must  provide  both  the owner and the contractor written
notice at least ten calendar days before  the  subcontractor's  intended
suspension. Such notice shall:
(A)  inform  the  owner and the contractor that payment for undisputed
billing amounts have not been received; and
(B) state the intent of the  contractor  to  suspend  performance  for
non-payment.
If  after  the  tenth calendar day following written notice either the
owner or the contractor has not cured the deficiency, the  subcontractor
may  suspend  performance  and/or  attempt to resolve in compliance with
subdivision three of this section.
(iii)  A  subcontractor  shall  not  be  deemed  in  breach   of   the
construction  contract  for  suspending  performance  pursuant  to  this
section.
(iv) (A) A contractor or subcontractor that  suspends  performance  as
provided in this section shall not be required to furnish further labor,
materials  or services until the contractor or subcontractor is paid the
undisputed invoice amount at the time period for completion as  provided
in  the construction contract, or a final determination has been made in
compliance with subdivision three of this section and complied with. All
of the time frames established within this section shall be extended for
the length of time performance  was  suspended.  Payment  of  documented
actual  costs  incurred  for  re-mobilization  resulting from suspension
shall be negotiated between the parties.
(B) In the event of suspension of a construction contract, as provided
in this article, all materials, equipment, tools, construction equipment
and machinery located  at  the  job  site  shall  remain  the  sole  and
exclusive  property  of  the  contractor  or  subcontractor and shall be
removed from the job site, if necessary, within a reasonable  period  of
time.  Access  to the contractor's or subcontractor's property shall not
be unreasonably withheld.
3. (a) Upon receipt of written notice of a complaint (i) that an owner
has violated the provisions of this article; (ii) that a contractor  has
violated  the  provisions  of  this  article;  (iii)  where a contractor
alleges a subcontractor has violated the  provisions  of  this  article;
(iv)  where  a  subcontractor  alleges  a  contractor  has  violated the
provisions of this article;  (v)  where  a  subcontractor  alleges  that
another  subcontractor has violated the provisions of this article; (vi)
where a contractor or subcontractor  alleges  a  material  supplier  has
violated  the  provisions  of  this  article;  or (vii) where a material
supplier  alleges  a  contractor  or  subcontractor  has  violated   the
provisions  of  this  article;  the parties shall attempt to resolve the
matter giving rise to such complaint.
(b) The written notice required under this section shall be  delivered
at  or sent by any means that provides written, third-party verification
of delivery to the last business  address  known  to  the  party  giving
notice.
(c)  If  efforts  to  resolve  such  matter to the satisfaction of all
parties are unsuccessful, the aggrieved party may refer the matter,  not
less  than  fifteen  days  of the receipt of third party verification of
delivery of the complaint, to the American Arbitration  Association  for

an   expedited  arbitration  pursuant  to  the  Rules  of  the  American
Arbitration Association.
(d)  Upon  conclusion  of  the arbitration proceedings, the arbitrator
shall submit to the parties his or her opinion and award  regarding  the
alleged violation.
(e) The award of the arbitrator shall be final and may only be vacated
or  modified  as  provided in article seventy-five of the civil practice
law and rules upon an application  made  within  the  time  provided  by
section seventy-five hundred two of the civil practice law and rules.