New York Amends Prompt Payment Act: Retainage Above 5% in Private Construction Contracts Now Void
February 10, 2026 —
Mark A. Snyder, Levi W. Barrett, Patrick T. Murray & Skyler L. Santomartino - Peckar & Abramson, P.C.In 2023 New York overhauled its Prompt Payment Act. The
2023 amendments, largely aimed at restricting the amount of retainage that can be withheld on private projects, were unclear about whether parties could contract around the statute, as they can with other provisions of the statute. The State Legislature recently clarified that issue.
On December 19, 2025, New York enacted a new law, tightening the State’s Prompt Payment Act retainage laws by amending the Prompt Payment Act under General Business Law § 757. Under § 757, the new law renders void any contract provision in private construction contracts that requires retainage in excess of 5% of the total contract sum, meaning owners cannot hold more than 5% from their prime contractors and prime contractors cannot hold more than 5% from their subcontractors.
Reprinted courtesy of
Mark A. Snyder, Peckar & Abramson, P.C.,
Levi W. Barrett, Peckar & Abramson, P.C.,
Patrick T. Murray, Peckar & Abramson, P.C. and
Skyler L. Santomartino, Peckar & Abramson, P.C.
Mr. Snyder may be contacted at msnyder@pecklaw.com
Mr. Barrett may be contacted at lbarrett@pecklaw.com
Mr. Murray may be contacted at pmurray@pecklaw.com
Mr. Santomartino may be contacted at ssantomartino@pecklaw.com
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Insured Does Not Prevail on Summary Judgment Motion Invoking Ensuing Loss Provision
May 05, 2026 —
Tred R. Eyerly - Insurance Law HawaiiThe court denied the insured’s motion for summary judgment finding genuine issues of fact regarding implication of the policy’s ensuing loss provision. Stella Prop. Dev.. & Event Productions, LLC v. Auto-Owners Ins. Co., 2026 U.S. Dist. LEXIS 15854 (W.D. Pa. Jan. 28, 2026).
Stella owned a cultural center that was insured under a commercial property all-risk policy issued by Auto-Owners. A windstorm with gusts of 65 miles per hour struck the Center causing damage. The Center’s inspector found extensive wind damage on nearly all facets of the roof. Further, the inspector found the existing organic shingles were in “very poor condition” and were “defective, discontinued, and no longer available.” The estimated cost of repairs to the roof was $108,010.52.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
Construction Companies Are Nearly Seven Times Safer With These Best Practices
June 15, 2026 —
ABC - Construction ExecutiveWASHINGTON, May 4—Associated Builders and Contractors released its
2026 Health and Safety Performance Report, an annual guide to health and safety best practices on construction jobsites. The 2026 report shows the positive effects of participating in
ABC’s STEP® Health and Safety Management System, which enables top-performing ABC members to achieve incident rates 686% safer than the U.S. Bureau of Labor Statistics construction industry average, reducing total recordable incident rates by 85%.
Established in 1989, STEP is a proven system that provides contractors and suppliers with a
robust, no-cost framework for measuring health and safety data and benchmarking with peers in the industry. This self-assessment tool helps participants identify real opportunities for scalable growth in their health and safety programs to lower their total recordable incident rates and become an employer of choice in a competitive labor market.
Reprinted courtesy of
ABC, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Reminder: FOLLOW Your Well Drafted Contract Provisions
February 17, 2026 —
Christopher G. Hill - Construction Law MusingsI have early and very often stated that your
contract is the basis for everything relating to your construction project. Everything from “
no damages for delay” clauses to
attorney fees to
indemnity are found in those documents. A well drafted construction contract
sets the expectations for the project clearly and, aside from just making it easier on everyone for a successful project, will ease things
should there be any dispute later.
However, all of the great drafting and pre-construction negotiation in the world won’t do you a bit of good if you don’t follow those provisions. I can’t count the number of times that a contractor or subcontractor has read and even understood the construction documents but then put the contract in the drawer and didn’t look at it again. Your experienced construction attorney, while helpful at the drafting and negotiation stages and beyond, cannot help do the work. Your lawyer can help you negotiate and
highlight the notice provisions of the contract but cannot provide that notice to the Owner or General Contractor when you have a claim. In short, the best contract in the world is
only as good as those that are following it.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Why Travelers Fought a Fire Claim for Invisible Smoke Damage
February 23, 2026 —
Elaine Silver - Engineering News-RecordJust 40 minutes after midnight on Sept. 27, 2018, the sky lit up over Birmingham, Ala. A fire engulfed an apartment building under construction—the last-to-be completed section of a wood-framed complex called the Metropolitan. It fueled one of the largest recorded blazes in the city’s history.
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Elaine Silver, Engineering News-RecordENR may be contacted at
enr@enr.com
A Couple of Mechanic’s Lien Bills in VA [UPDATED]
February 23, 2026 —
Christopher G. Hill - Construction Law MusingsWell, its that time of year again, the Virginia General Assembly is in session and looking to make changes to all kinds of things here in the Commonwealth. While most of those changes are well outside of the subject of Construction Law Musings, changes to the
mechanic’s lien statutes certainly are not. This year, the Virginia General Assembly is poised to make some big changes if certain legislation gets out of committee and passes the legislature, a description and some comments on these follow:
HB752 – Mechanics’ liens; liens attaching to property; memorandum of lien. [Original Description] Removes the exclusion of the attachment of a mechanic’s lien to property improved or repaired when the lien is based on a claim for repairs or existing structures. The bill further removes (i) the ability of a lien claimant to file any number of memoranda of lien including the details relating to the lien and (ii) the provisions of the Code specifying that no memorandum filed shall include sums due for (a) labor or materials furnished more than 150 days prior to the last day labor was performed or (b) material furnished to the job preceding the filing of such memorandum.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Turnover Traps for Community Associations: Investigate First, Release Claims Later
April 14, 2026 —
Nicholas B. Vargo - Ball Janik LLPTurnover of a community association from developer control to owner control is a uniquely vulnerable moment. Developers are increasingly presenting Florida condominium and homeowners’ associations with “standard” settlement or release agreements at turnover, often being framed as routine steps to finalize the transition of control. In reality, these agreements can have sweeping consequences, including the release of construction-defect claims before the association has conducted any meaningful independent evaluation.
The developer has years of project knowledge and access to plans, subcontractors, and internal records. The newly elected board is just beginning to organize, obtain documents, and understand the property’s condition. Many defects, especially those involving roofing, waterproofing, windows, or structural components, are latent and not yet visible. Signing a release at this stage means the association is making a binding decision under conditions of uncertainty, without full information, to release all future potential claims.
Over the last few years, there has been a rise in reports of developers offering a packaged deal: they agree to complete certain repairs, often minor punch-list or cosmetic items, and to “forgive” an alleged financial deficit (often around $50,000) supposedly owed by the association from the developer-control period. In exchange, the association is asked to sign a broad release covering all claims, including known and unknown construction defects. To a new HOA board that received their community with limited operating and reserve funds, they are left with a difficult decision to either accept the developer’s offer or assess their owners to pay this alleged debt.
These agreements are occasionally presented through community management companies, which may describe them as “standard” or "routine.” Whether due to misunderstanding or influence from the developer, management companies can unintentionally reinforce the idea that signing is expected. Any recommendation provided to HOAs about whether to sign these releases could open community management to liability down the road. The best practice for both associations and community managers is to refer any agreements to be reviewed by general counsel for the association.
The following two case studies illustrate the real-world consequences:
Case Study One: A newly transitioned board relies on its management company to negotiate with the developer-builder to resolve irrigation issues, pond concerns, and signage deficiencies, along with forgiving an asserted financial shortfall. In exchange, the board signs a broad release covering all claims, including latent defects.
Within a year, several punch-list items remain incomplete, and more serious issues arise. When the association demands completion, the developer delays, prompting the association to seek advice on how to enforce the settlement agreement. The association hires counsel to hold the developer responsible for both the previously agreed-upon items and newly identified construction defects. However, when the association brings claims against the developer, the developer points to the release of all potential construction defects in the community. Thus, the only remaining remedy is limited to enforcement of the specific punch-list terms. The community, still relatively new, has no viable claims against the developer-builder for the construction defects. With warranties expired and the release, the association must fund repairs through special assessments, despite defects that would otherwise have been actionable.
Case Study Two: A community is presented with a similar agreement as above. The management company encourages execution, suggesting it is standard and even telling the board to “name your price.” The developer also pressures the newly elected board to sign.
Instead of signing, the board consults with their attorney. Counsel advises the board not to sign the release and recommends further investigation. Engineers are retained and identify early indicators of broader issues, including stucco cracking, water intrusion, and irrigation deficiencies. Based on this information, the association declines to sign the release. Subsequent evaluation reveals potentially significant construction-defect claims, allowing the community to pursue recovery that would have been lost under the proposed agreement.
These scenarios underscore a fundamental point: signing a release at turnover is not an administrative formality—it is a major legal decision. Board members act in a fiduciary capacity on behalf of their community, and their decisions can bind all current and future owners. At turnover, an association’s right is to investigate and pursue claims. Preserving that right until a full and independent evaluation is completed is not adversarial—it is responsible governance.
Accordingly, associations should retain independent evaluations of the property and consult qualified legal counsel before signing any “standard” agreements, especially ones involving a release of future claims.
Nicholas B. Vargo is a partner in Ball Janik LLP’s Construction Practice Group. He may be reached at nvargo@balljanik.com.
Chambers Global 2026 Recognizes Sheppard Practices and Attorneys
March 03, 2026 —
SheppardSheppard has been recognized by Chambers Global 2026 in the following practice areas:
- Privacy & Data Security in the United States
- Projects: Power & Renewables: Transactional in the United States
- Projects: Renewables & Alternative Energy in the United States
Additionally, the following Sheppard partners have been recognized by Chambers Global 2026:
- Justin Boose (Projects: Renewables & Alternative Energy – USA)
- Will Chen (Intellectual Property: International Firms – South Korea)
- David Chun (Intellectual Property – South Korea)
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Sheppard
