HB 360 – AS INTRODUCED
2007 SESSION
05/03
HOUSE BILL 360
AN ACT relative to commercial construction contracts.
SPONSORS: Rep. Infantine, Hills 13
This bill establishes remedies for breach of payment in commercial construction contracts.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
07-1131
05/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seven
AN ACT relative to commercial construction contracts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Commercial Construction Contracts. Amend RSA by inserting after chapter 359-H the following new chapter:
CHAPTER 359-I
COMMERCIAL CONSTRUCTION CONTRACTS
359-I:1 Definitions. In this chapter:
I. “Construction” means furnishing labor, equipment, material, or supplies used or consumed for the design, construction, alteration, renovation, repair, or maintenance of a building, structure, road, bridge, water line, sewer line, oil line, gas line, appurtenance, or other improvement to real property, including any moving, demolition, or excavation.
II. “Construction contract” or “contract” means any contract written or oral for construction in this state on or after January 1, 2008, including any improvements to real property that are associated with such construction, or any subcontract for construction with a subcontractor or subcontractors, or between a subcontractor and any other subcontractor. “Construction contract” or “contract” does not include:
(a) 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.
(b) A contract or project funded or insured by the United States Department of Housing and Urban Development.
(c) A contract between an owner and a contractor for an amount of $10,000 or less or a subcontract which results from such a contract.
(d) A contract for a building intended for residential occupancy containing 4 or fewer units.
III. “Owner” means the owner of record or lessee of real property upon which construction is to be or is being performed pursuant to a construction contract regarding such real property.
IV. “Contractor” means a person performing construction and having a contract or oral agreement with an owner of the real property or with a trustee, agent, or spouse of an owner.
V. “Subcontractor” means a person performing construction covered by a contract or oral agreement between an owner and a contractor but not having a contract with the owner.
359-I:2 Construction Contract; Remedies for Breach of Payment.
I. The owner shall pay the contractor in accordance with the terms of the construction contract.
II. If payment is not paid by an owner in accordance with the requirements in the applicable construction contract, a contractor to whom money is owed and with whom the owner has a direct contractual relationship shall provide notice of the claim to the owner by registered delivery or certified mail.
III. If payment is not paid by a contractor in accordance with the requirements of the applicable construction contract, the subcontractor to whom money is owed and with whom the contractor has a direct contractual relationship, shall provide notice of the claim to the contractor by registered delivery or certified mail.
IV. If payment is not paid by a subcontractor in accordance with the requirements of the applicable construction contract, the subcontractor to whom money is owed and with whom the subcontractor has a direct contractual relationship, shall provide notice of the claim to the subcontractor by registered delivery or certified mail.
V. Ten days after the receipt of any notice under paragraph II, III, or IV, the owner, contractor, or subcontractor, as the case may be, shall be liable for interest on the amount due of 1½ percent per month. In addition, any owner, contractor, or subcontractor who is found to have withheld payments to a party providing such notice shall be liable for an additional 10 percent of the payment due. In any such action, the prevailing party shall be entitled to recover its legal expenses, including reasonable attorney’s fees and costs.
VI. This section shall not be construed to prohibit partial payments prior to final payment under the contract.
VII. This section is applicable to all subcontractors for material or labor whether they have contracted directly with the contractor or with some other subcontractor.
VIII. Nothing in this chapter shall prevent the owner, contractor, or subcontractor from withholding, in whole or in part, under a construction contract an amount equaling the value of any claims against an invoicing contractor or subcontractor.
IX. If the request for payment is only partially in dispute, the owner, contractor, or subcontractor is not entitled to withhold payment of the undisputed amount on the designated date.
IX. No contract shall contain a waiver of rights under this chapter, and any such waiver shall be null and void.
359-I:3 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 New Hampshire shall be void, regardless of whether the construction contract was executed in this state.
359-I:4 Surety Obligations. No surety shall be required to include in the payment of a bond interest, costs, penalties, or attorney’s fees imposed on the principal of such bond under any provision of this chapter, unless the terms of the bond expressly state the surety is obligated to pay such interest, costs, and penalties or attorney’s fees.
2 Effective Date. This act shall take effect January 1, 2008.