New York Retainage Law Reform Effort Coming this Year
New York State Assemblyman Edward Braunstein will serve as the primary sponsor on legislation this year designed to bar general contractors from holding money from material suppliers. When the National Association of Credit Management (NACM) asked Braunstein, he said it was a fairness issue. He believes that the proposal has a strong chance this year in the state assembly.
Representatives from supplier trade associations are making the case that they are selling complete products, which should be treated differently than services (labor) provided by subcontractors through the end of a project. They characterize it as a financial “drain” holding back suppliers from involvement in other projects.
Chris Ring, of NACM’s Secured Transactions Services, agreed that materialmen are the most vulnerable and “held hostage” because their money is often gone for the longest time. That could be upwards of four years if awaiting completion on something like a skyscraper in New York City. But he is far from confident about the prospects of the proposal sailing through the Assembly quite so easily. “I don’t see any reason why general contractors would lay down for this because they benefit so much from retainage laws,” Ring said of possible pushback.
- Brian Shappell, CBA, CICP, NACM staff writer
See the extended version of this story with more analysis from Ring, Braunstein and Dana Schnipper, of JC Ryan EBCO/H&G LLC and the Northeast Retail Lumber Association, in the News Makers section at www.nacmsts.com and this week’s edition of eNews, available Thursday.