In the realm of construction, retainage refers to a portion of funds withheld from payments to contractors and subcontractors until the completion of the work. It serves as a tool employed by owners and developers to ensure the timely, comprehensive, and accurate fulfillment of a project. Notably, on November 17, 2023, significant changes were made to the longstanding retainage practices following the signing of amendments to Sections 756-a and 756-c of New York’s Prompt Payment Act (the “Act”) by Governor Kathy Hochul. These amendments, effective immediately, specifically address the retainage that can be withheld from payment and invoicing final payments in covered construction contracts. It is essential to recognize that while the amendments took effect upon signing, they are applicable only to contracts entered into on or after November 17, 2023.
Article courtesy of NY Business Journal
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