NY A02279

Requires construction contract retainage to be deposited in a separate interest-bearing escrow account with a third-party escrow agent, excluding contracts financed by public benefit corporations.

Makes retained funds the sole property of the contractor as of deposit, with interest accruing at rates at least equal to prevailing escrow deposit rates.

Requires escrowed retainage to be released within 30 days after final work approval, or the owner must pay one percent per month interest in addition to escrow interest.

Limits contractor and subcontractor retainage to the same percentage deposited in escrow by the owner, and requires release within five days of receiving escrowed funds or face one percent monthly interest penalties.

Takes effect immediately and applies to all construction contracts entered into on or after the effective date.