N.Y. General Business Law § 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.