Revitalization district contracts would let builders pause for nonpayment

Construction contracts with revitalization districts must let contractors and subcontractors pause work or end their contracts in specified nonpayment situations. The rules cover district construction contracts, contractors, subcontractors, and approved payments for their work. A contractor may act when the district does not timely pay amounts certified and approved for payment. A subcontractor may act when the district and contractor fail to pay, when the contractor fails to pay despite district payment, or when the district refuses to approve and certify work for reasons unrelated to the subcontractor. The contractor or subcontractor must give written notice before pausing or ending the contract. A contractor or subcontractor acting under these rules is not considered to have breached the contract. These requirements apply to revitalization district infrastructure construction contracts executed after the act's effective date.

Construction contracts must allow unpaid builders to stop supplying labor, materials, or services and must provide enforcement remedies. The requirements apply to contractors and subcontractors that pause work under the payment provisions in a district construction contract. Work may stop until the certified and approved amount is paid, along with reasonable costs from shutting down or restarting the project. The successful party in an action or arbitration to enforce these rights must receive reasonable attorney fees and costs. Written notice may be delivered in person or sent using a method that verifies delivery to the recipient's last known business address. These terms apply to covered infrastructure construction contracts executed after the act's effective date.