ESSA Legislative Track Record
Through legal action and strong legislative advocacy, ESSA has helped protect the rights of subcontractors on public and private work for over 40 years. Today, ESSA is widely recognized as the voice of subcontractors in the State Legislature and Governor’s Office. ESSA has an impressive track record of passing legislation favorable to subcontractors, and defeating bills harmful to the industry. Below is a brief chronology of our major legislative successes:
ESSA Legislative Successes
2023 5% Retainage Bill (Sections 756-a and 756-c of the NYS General Business Law)
This bill will limit the withholding of retainage by owners of private commercial construction projects, where the value of the project equals or exceeds $150,000, to no more than five (5) percent of the contract sum. The law also accelerates final payment to the contractor (and by extension to subcontractors) by providing that the contractor may submit a final invoice for payment in full upon reaching substantial completion, as such term is defined in the contract or as it is contemplated by the terms of the contract.
2020 COMPLETE PUNCHLIST WITHIN 45 BUSINESS DAYS (Section 139-f State Finance Law and Section 106-b General Municipal Law)
Requires public owners to provide the prime contractor with a complete punch list no later than 45 business days after substantial completion has been reached. The prime contractor, in turn, must provide subcontractors with their portions of the punch list within 5 business days thereafter.
2011 STATUTE OF LIMITATIONS ON PAYMENT BOND CLAIMS (SECTION 137 STATE FINANCE LAW)
Extended the statute of limitations for initiating a payment bond claim on public projects to one year from the date the project is completed and accepted by the owner.
2011 LIEN ON RETAINAGE (SECTION 10 LIEN LAW)
Allows subcontractors to effectively reopen their lien rights and file a lien for unpaid retainage up to 90 days after the retainage was due to be released.
2009 PAYMENT BOND PRECONDITION (SECTION 5-322.1 GENERAL OBLIGATIONS LAW)
Made contract provisions requiring subcontractors and suppliers to exhaust all lien remedies before initiating legal action against a payment bond against public policy, void and unenforceable.
2006 LIEN LAW FORCLOSURE ACTIONS (SECTION 44B LIEN LAW)
Exempts owners as necessary parties to lien foreclosure actions where the lien has been “bonded off.”
2004 PAYMENT BOND ON HYBRID PROJECTS (SECTION 5 LIEN LAW)
Requires payment bonds or other forms of security to be posted by owners on certain “hybrid” construction projects valued at more than $250,000, such as those where a private building is constructed on public land.
2003 TECHNICAL AMENDMENT - DURATION OF PUBLIC LIEN (SECTION 21 LIEN LAW)
Made section 21 of the lien law consistent with section 18 of the lien law, as amended by ESSA in 2000, which extended the duration of public improvement liens from six months to one year.
2002 LIEN DISCHARGE UNDERTAKINGS - (SECTION 21 LIEN LAW)
Set the amount of an undertaking required to discharge a lien at 110% of the lien amount. Prior to enactment of this law, undertakings to discharge liens (usually in the form of a bond), were required to be set by a judge with or without a stipulated agreement between the surety providing the bond and the lienor. This law eliminates the time and expense of this procedure by setting the amount of the undertaking at 110% of the lien amount.
2000 EXTENDS DURATION OF PUBLIC LIEN (SECTION 18 LIEN LAW)
Extended the duration of public improvement liens from six months to one year. Also established a limit on the number of extensions of both private and public improvement liens which are allowed.
1996 SERVING NOTICE OF LIEN (SECTION 11 LIEN LAW)
Made the Lien Law more “user friendly” by allowing a lienor to serve a copy of the Notice of Lien on the owner and/or contractor up to five days prior to filing the Notice of Lien in the County Clerk’s Office or with the public owner.
1995 LOCAL GOVERNMENT PROMPT PAY AMENDMENT (SECTION 106-B GENERAL MUNICIPAL LAW)
Made the local government prompt payment law permanent and lowered the payment period in most cases from 45 to 30 days.
1993 HOLD HARMLESS TECHNICAL AMENDMENT (SECTION 5-322.1 GENERAL MUNICIPAL LAW)
Made a technical amendment to Section 5-322.1 of the General Obligations Law.
1992 LIEN ON IDA PROJECTS (SECTION 2 LIEN LAW)
Amended section 2 of the Lien Law by providing contractors, subcontractors and suppliers lien rights on projects financed through Industrial Development Agencies.
1992 LOCAL GOVERNMENT PROMPT PAYMENT (SECTION 106-B GENERAL MUNICIPAL LAW)
Requires local governments to pay contractors within 45 days after receipt of an approvable requisition or pay an interest penalty. It also requires contractors that receive interest from a local government to pass along a pro-rata share of such interest to subcontractors. Finally, it requires contractors to pay subcontractors and suppliers within 7 days of their receipt of payment from the public owner, or pay interest to these subcontractors and suppliers.
1991 SERVICE OF LIEN BY MAIL (SECTION 11 LIEN LAW)
Made clear that lienors may choose from a number of alternative methods of serving a copy of the notice of lien upon the owner in the first instance, without first having to attempt personal service.
1990 SIMULTANEOUS NOTICE (SECTION 11-B LIEN LAW)
Allows the mandatory service of a copy of the notice of lien to the contractor to be made either simultaneously with the filing of such notice with the County Clerk, or within 30 days thereafter.
1990 SUBCONTRACTOR PROMPT PAYMENT (SECTION 139-F STATE FINANCE LAW)
Added teeth to the 15-day payment period between prime contractors and subcontractors on state projects by assessing interest penalties against prime contractors who fail to pay subcontractors within 15 days after receiving payment from a state agency.
1989 INTEREST PASS -THROUGH ON LATE PAYMENTS (SECTION 179-F STATE FINANCE LAW)
Requires prime contractors to pass through to subcontractors on a pro rata basis a share of any interest for late payments received by the prime contractor from the State pursuant to the 1984 prompt payment law.
1989 EXTENSION OF MECHANIC'S LIEN (SECTIONS 17 AND 18 LIEN LAW)
Allows a mechanic’s lien on private property to be extended beyond its one-year duration by filing an extension with the office of the county clerk, it also allows a public improvement lien to be extended beyond its six-month duration by filing an extension with the office of the state comptroller and the financial officer of the public entity.
1988 LIEN FILING CLARIFICATION (SECTION 10 LIEN LAW)
Clarified the lien law as to when the eight month period as opposed to the four month period for filing a mechanic’s lien is applicable, by specifically noting that the eight month period applies when the work is being done for a developer of multiple single family dwellings.
1988 TERMS OF OWNER-CONTRACTOR CONTRACT (SECTION 8 LIEN LAW)
Requires a construction owner, upon request, to provide a subcontractor or supplier the terms of his contract with the prime contractor, within 30 days of such request.
1986 STATUTE OF LIMITATIONS/TRUST FUND ACTIONS (ARTICLE 3-A LIEN LAW)
Extended the statute of limitations on trust fund actions to either one year after the completion of the improvement or one year from the date on which final payment under the subcontractor’s contract becomes due, whichever is later.
1985 INDIVIDUAL ACTIONS ON TRUST FUND DIVERSION (ARTICLE 3-A LIEN LAW)
Allows an individual subcontractor, at the discretion of the court to bring an action to enforce a trust where the total number of trust beneficiaries is so large that joinder of all members would be impractical.
1985 INTEREST ON DIVERTED TRUST REFUNDS (ARTICLE 3-A LIEN LAW)
Allows subcontractors to collect interest on diverted trust funds after successfully bringing an action for trust fund diversion against a contractor.
1984 PLAN DEPOSIT REFUND (SECTIONS 143.2 STATE FINANCE LAW AND 102.2 GENERAL MUNICIPAL LAW)
Allows non-bidders (including subcontractors) to recoup plan deposit refunds for one set of plans less the actual cost of reproduction of the plans.
1984 PROMPT PAYMENT ARTICLE 11-A STATE FINANCE LAW)
Mandates that State agencies pay their bills within 45 days (dropped to 30 days in 1988) or face market rate interest penalties.
1983 CONTINGENT PAYMENT CLAUSE SECTIONS 139-F STATE FINANCE LAW AND 106-B GENERAL MUNICIPAL LAW)
Deems invalid any contract clause which makes payment from the contractor to the subcontractor contingent upon receipt of payment from the owner to the contractor, unless the contractor has requisitioned such payment within ninety days of substantial completion of the project.
1982 LIEN FILING EXTENSION (SECTION 10 LIEN FILING LAW)
Extended the time period for filing a Mechanic’s Lien on private work from 4 months to 8 months after the last performance of work or last furnishing of materials, except that work or material supplied to a single family dwelling retains a 4 month filing period.
1981 HOLD HARMLESS LAW (SECTION 5-322.1 GENERAL OBLIGATIONS LAW)
Prohibits the use of hold harmless agreements in the construction industry whereby project owners and general contractors require subcontractors to indemnify them for the partial negligence of such owners and general contractors.
1981 TECHNICAL CORRECTIONS (SECTIONS 139-F STATE FINANCE LAW AND 106-B GENERAL MUNICIPAL LAW)
Made a technical correction to Chapter 769 of the Laws of 1978 and clarifies the fiscal responsibilities of general contractors to pass on a percentage of each progress payment to a subcontractor which reflects the percentage of that subcontractor’s work completed as of the date of the requisition to the owner.
1981 FILING OF BONDS (SECTION 5-322.3 GENERAL OBLIGATIONS LAW)
Requires the filing of copies of payment and performance bond when required on private projects, in the County Clerk’s office in the county in which the improvement is performed when the amount of construction exceeds $100,000.
1980 CLAIM NOTICES SECTION 137-3(A) STATE FINANCE LAW)
Allows a notice under the payment bond to be filed within 120 days rather than the 90 days previously allowed to a second tier sub or supplier. It also extends suit time for one year from date project is accepted rather than when last material or labor was furnished.
1980 ATTORNEYS FEES (SECTION 137-4(A) STATE FINANCE LAW)
Enables Subcontractors who make successful payment bond claims for overdue payments on public projects to recover interest and legal fees.
1978 PAYMENT RETAINAGE LAW (SECTIONS 139F STATE FINANCE LAW AND 106-B GENERAL MUNICIPAL LAW)
Requires public owners to retain not more than 5% of each progress payment:; public owners to pay for materials delivered to the site or off site if the materials are in short supply or specially fabricated: and the payment of subcontractors within 7 days of the payment to the prime contractor from the public owner.
1978 CONTRACT INFORMATION LAW (SECTION 5-322.2 GENERAL OBLIGATIONS LAW)
Requires that all construction contracts executed after Saturday September 23, 1978 must contain: The full name and address of the owner: the full name and address of the owner of the land and the owner of the building if different and a description by street address, or section, block and lot numbers or reference to a deed book and page number. This bill gave contractors and subcontractors access to information which enables them to file a lien or initiate action to collect unpaid money.
1977 NOTICE OF COMPLETION (SECTION 11-A LIEN LAW)
Allows any person performing work or supplying materials to any NYS public works project to file a demand of notification of acceptance. Mandates that individual be notified within 5 days of acceptance.
1976 DESIGNATED CARRIER LAW (SECTION9-A INSURANCE LAW)
Prohibits the contractual duty of a contractor or subcontractor to purchase or obtain any insurance policies or surety bonds specified in such contract from a particular insurance or surety company, agent or broker.
1975 HOLD HARMLESS LAW (SECTION 5-322.1 GENERAL OBLIGATIONS LAW)
Declared agreements holding owners and contractors “harmless” from their “sole” negligence and liability void and unenforceable.
1975 WAIVER OF LIEN LAW ( SECTION 34 LIEN LAW)
Declared contracts or agreements having provisions where the right to file or enforce a lien was relinquished to be against public policy, void and unenforceable.
