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ARTICLE · 06 FEBRUARY 2024

Changes To New York's Prompt Payment Act: Construction Contract Considerations For Developers And Owners

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New York's Prompt Payment Act ("Act") gives important rights to contractors and other parties who provide services or materials to private construction projects in their quest for prompt payment.

United StatesReal Estate and Construction
Robert Epstein
Robert Epstein

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  • New York's amended Prompt Payment Act applies to all construction contracts exceeding $150,000 and renders void and unenforceable any contract provisions inconsistent with the Act.
  • Under the amended Act, owners may not withhold retainage of more than 5% of the contract sum.
  • Under the amended Act, contractors can submit to the owner their final invoice for payment of retainage upon substantial completion of the project.

New York's Prompt Payment Act ("Act") gives important rights to contractors and other parties who provide services or materials to private construction projects in their quest for prompt payment. The Act also places heavy burdens on project developers and owners, requiring them to take certain actions by strict deadlines at the risk of waiving their right to dispute amounts owed for construction work.

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