Table of Contents Sec. 42-158i. Definitions. As used in sections 42-158i to 42-158n, inclusive, unless the context otherwise requires: Sec. 42-158j. Required contract provisions re timely payment of contractors,
subcontractors and suppliers. Remedy for untimely payments. Penalties. Escrow
accounts. Withholding payments due because of disputes, when prohibited. Progress payments. (a) Unless otherwise agreed by the parties in the terms of a written
construction contract, each construction contract shall contain the following provisions:
(1) A requirement that the owner pay any amounts due any contractor, subcontractor
or supplier in a direct contractual relationship with the owner, whether for labor performed or materials furnished, not later than fifteen days after the date any request for
payment has been made by such contractor, subcontractor or supplier; (2) a requirement
that the contractor pay any amounts due any subcontractor or supplier, whether for labor
performed or materials furnished, not later than fifteen days after the date the contractor
receives payment from the owner which encompasses labor performed or materials
furnished by such subcontractor or supplier; and (3) a requirement that the contractor
shall include in each of its subcontracts a provision requiring each subcontractor and
supplier to pay any amounts due any of its subcontractors or suppliers, whether for
labor performed or materials furnished, not later than fifteen days after the date such
subcontractor or supplier receives a payment from the contractor which encompasses
labor performed or materials furnished by such subcontractor or supplier. Sec. 42-158k. Retainage limitation. No construction contract may provide for
any retainage in an amount that exceeds seven and one-half per cent of the estimated
amount of a progress payment for the life of the construction project. This section shall
not be construed to require that a construction contract contain a retainage provision. Sec. 42-158l. Clauses waiving right to claim mechanic's lien or claim against
a payment bond void. (a) Any provision in a construction contract or any periodic lien
waiver issued pursuant to a construction contract that purports to waive or release the
right of a contractor, subcontractor or supplier engaged to perform services, perform
labor or furnish materials under the construction contract to (1) claim a mechanic's lien,
or (2) make a claim against a payment bond, for services, labor or materials which have
not yet been performed and paid for shall be void and of no effect. Sec. 42-158m. Adjudication in this state. Any provision in a construction contract for the performance of work on a construction site located in this state that purports
to require that any dispute arising under the construction contract be adjudicated in or
under the laws of a state other than Connecticut shall be void and of no effect, regardless
of whether the construction contract was executed in this state. Sec. 42-158n. Required job site postings. At or before the commencement of any
work under a construction contract, the owner shall post and maintain in a conspicuous
place at the construction site (1) the name and address of the owner and any agent
authorized to accept service of a certificate of mechanic's lien on behalf of the owner
in any action, suit or proceeding for the enforcement of any obligation of the owner
arising out of the construction contract, (2) the volume and page number of the land
records of the town in which such property is located, and (3) if a payment bond exists,
the name and address of the surety that issued the payment bond.
Sec. 42-158i. Definitions.
Sec. 42-158j. Required contract provisions re timely payment of contractors, subcontractors and suppliers. Remedy for untimely payments. Penalties. Escrow accounts. Withholding
payments due because of disputes, when prohibited. Progress payments.
Sec. 42-158k. Retainage limitation.
Sec. 42-158l. Clauses waiving right to claim mechanic's lien or claim against a payment
bond void.
Sec. 42-158m. Adjudication in this state.
Sec. 42-158n. Required job site postings.
Sec. 42-158o. Surety obligations.
(1) "Owner" means any individual, corporation, partnership, limited partnership,
limited liability company or other business entity that is the owner or lessee of real
property upon which a commercial or industrial building is to be or is being constructed,
renovated or rehabilitated pursuant to a construction contract. Commercial or industrial
building shall not be construed to include any building intended for residential occupancy or use.
(2) "Construction contract" or "contract" means any contract for the construction
in this state on or after October 1, 1999, of a commercial or industrial building, or
for the renovation or rehabilitation of a commercial or industrial building for which a
certificate of occupancy is required, including any improvements to real property that
are associated with such construction, renovation or rehabilitation, or any subcontract for
a project associated with the construction, renovation or rehabilitation of a commercial or
industrial building between an owner and a contractor, or between a contractor and a
subcontractor or subcontractors, or between a subcontractor and any other subcontractor,
but does not include any public works or other building contract entered into with this
state, the United States, any other state, and any municipality or other political subdivision of this state or any other state.
(3) "Retainage" means a sum withheld from progress payments to the contractor
or subcontractor in accordance with the terms of a construction contract, but does not
include any sum withheld due to the contractor's or subcontractor's failure to comply
with construction plans and specifications.
(P.A. 99-153, S. 1.)
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(b) (1) If payment is not made by an owner in accordance with the requirements
of subdivision (1) of subsection (a) of this section or any applicable construction contract, such contractor, subcontractor or supplier shall set forth its claim against the owner
through notice by registered or certified mail.
(2) If payment is not made by a contractor in accordance with the requirements of
subdivision (2) of subsection (a) of this section or any applicable construction contract,
the subcontractor or supplier shall set forth its claim against the contractor through notice
by registered or certified mail.
(3) If payment is not made by a subcontractor or supplier in accordance with the
provisions of subdivision (3) of subsection (a) of this section, the subcontractor or supplier to whom money is owed shall set forth its claim against the subcontractor or supplier
who has failed to comply with the provisions of said subdivision (3) through notice by
registered or certified mail.
(4) Ten days after the receipt of any notice specified in subdivisions (1), (2) and
(3) of this subsection, the owner, contractor, subcontractor or supplier, as the case may
be, shall be liable for interest on the amount due and owing at the rate of one per cent
per month. Such interest shall accrue beginning on the date any such notice is received.
In addition, such owner, contractor, subcontractor or supplier, upon written demand
from the party providing such notice, shall be required to place funds in the amount of
the claim, plus such interest of one per cent per month, in an interest-bearing escrow
account in a bank in this state, provided such owner, contractor, subcontractor or supplier
may refuse to place the funds in escrow on the grounds that the party making such
demand has not substantially performed the work or supplied the materials according
to the terms of the construction contract. In the event that such owner, contractor, subcontractor or supplier refuses to place such funds in escrow and such owner, contractor,
subcontractor or supplier is found to have unreasonably withheld payment due a party
providing such notice, such owner, contractor, subcontractor or supplier shall be liable
for reasonable attorneys' fees plus interest on the amount due and owing at the rate of
one per cent per month. In addition, any owner, contractor, subcontractor or supplier
who is found to have withheld payments to a party providing such notice in bad faith
shall be liable for ten per cent damages.
(c) No payment may be withheld from a subcontractor or supplier for work performed or materials furnished because of a dispute between a contractor and another
contractor, subcontractor or supplier.
(d) This section shall not be construed to prohibit progress payments prior to final
payment of the contract and is applicable to all subcontractors and suppliers for material
or labor whether they have contracted directly with the contractor or with some other
subcontractor on the work.
(P.A. 99-153, S. 2.)
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(P.A. 99-153, S. 3.)
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(b) Notwithstanding any provision of subsection (a) of this section, this section shall
not be construed to prohibit (1) the subordination of a mechanic's lien to the lien of a
mortgage or security interest, or (2) the enforcement of an agreement to subordinate a
mechanic's lien to the lien of a mortgage or security interest.
(P.A. 99-153, S. 4.)
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(P.A. 99-153, S. 5.)
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(P.A. 99-153, S. 6.)
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