In addition to the recent amendment to the New York Lien Law, which extends the time within which mechanic's liens for retainage on private improvement projects may be filed to ninety (90) days after the date the retainage was due to be released, the New York State Finance Law has also been amended to extend the time to bring an action on a labor and material payment bond required to be issued in connection with public improvement projects. The Amendment now permits suits to be filed within one year from the date on which the public improvement was completed and accepted by the public owner. The old language in the statute measured the one year time period from the date when final payment became due under the claimant's subcontract.
Thus, similar to the Lien Law amendment, this Amendment is intended to expand the time within which claims for nonpayment may be brought and eliminates the need for those early construction trades to file suit before a project is even finished. However, it must be pointed out that the Amendment does not change the statutory requirement that those without a direct contract with the prime contractor that issues the payment bond (i.e., sub-subcontractors and suppliers to subcontractors) must still provide written notice of their claim within 120 days from the date on which they last provided their labor or material. Therefore, while everyone's time to sue on the bond is now extended beyond project completion and acceptance, there are those that will still need to take affirmative action to protect and preserve their bond rights prior to project completion.
We hope you find this information helpful. If you have questions pertaining to the material presented in this Client Alert or other legal issues, please contact Joseph P. Asselta, Esq. or any other attorney at Agovino & Asselta, LLP at (516) 248-9880.
Disclaimer
This Client Alert provides an overview of certain aspects of a particular new law. It has been prepared by Agovino & Asselta, LLP for informational purposes only and is not intended to serve as, and should not be considered, legal advice for any specific fact situation.Readers should not act upon the information contained in these publications without the assistance of professional counsel.
