• Recent Amendments to New York Prompt Payment Act Could Represent a Significant Change for Owners

    On November 17, 2023, New York State Governor Kathy Hochul signed into law a bill amending certain provisions of the New York Prompt Payment Act (General Business Law, Article 35-E) (the “PPA”).

    Depending on how the courts/arbitrators interpret the PPA, the recent amendments (the “Amended Provisions”) could represent a significant change in the law for owners (and general contractors).  Specifically, the Amended Provisions:

    (i)    permit a contractor to submit a final invoice for payment in full “upon reaching substantial completion” (GBL § 756-a(2)(a)) (by contrast, the pre-amendment statutory provision entitled a contractor to submit a final invoice only “upon the performance of all of the contractor’s obligations under the contract”); and

    (ii)  limit the amount of retainage an owner may withhold to “no more than” five percent (5%) of the contract sum (GBL § 756-c) (the pre-amendment statutory provision entitled an owner to retain a “reasonable amount” of the contract sum as retainage).  

    If the terms required by the Amended Provisions cannot be varied, they would obviously present a significant change in the common practice of holding ten percent retainage through substantial completion and of withholding final payment until after final completion.

    However, based on the express language of other existing provisions of the PPA, there are strong arguments that, notwithstanding the enactment of the amended statute, owners and contractors may still enter into contracts which contain terms at variance with the Amended Provisions. The PPA includes a broad provision entitling the parties to a construction contract to agree to vary the provisions of the PPA, with certain exceptions. Specifically, GBL § 756-a states: “Except as otherwise provided in this article, the terms and conditions of a construction contract shall supersede the provisions of this article and govern the conduct of the parties thereto.”  (Emphasis added.)  The exceptions to the supremacy of the parties’ construction contract as provided in the above-quoted language are set forth in GBL § 757, entitled “Void provisions”, which specifies four categories of construction contract provisions which are “void and unenforceable” as inconsistent with the unalterable requirements of the PPA.  Specifically, GBL § 757 voids any construction contract provision which: (1) makes the contract subject to the laws of another state or requires a dispute resolution proceeding arising from the contract to be conducted in another state; (2) prohibits a contractor from suspending performance for the owner’s failure to make prompt payment; (3) denies the use of expedited arbitration to one or both parties under GBL § 756-b; and (4) varies payment provisions under GBL § 756-a(3) and remedies for non-payment under GBL § 756-b. 

    Significantly, construction contract provisions regarding the two subjects of the Amended Provisions – the timing of the submission of a final invoice and the amount of retainage which can be withheld – are not included in the list of “[v]oid provisions” in GBL § 757 (which section was not altered as part of the recent amendments).  Consequently, there is a strong argument that construction contract provisions which are contrary to the Amended Provisions should supersede the Amended Provisions and be enforceable.  However, due to their recent enactment, the Amended Provisions have not yet been interpreted by a New York court, so the ultimate effect of the Amended Provisions remains somewhat unclear at this time.

    If you have questions about the Amended Provisions, please contact one of our partners: Matthew S. Quinn, at (212) 447-5510 or This email address is being protected from spambots. You need JavaScript enabled to view it., Christopher P. McCabe, at (212) 447-5520 or This email address is being protected from spambots. You need JavaScript enabled to view it., Simon Block, at (212) 447-5530 or This email address is being protected from spambots. You need JavaScript enabled to view it., or Jonathan Krukas, at (212) 447-5560 or This email address is being protected from spambots. You need JavaScript enabled to view it..

    The information contained in this email is provided for informational purposes only, should not be construed as legal advice on any subject matter, and does not create an attorney-client relationship between you and Quinn McCabe LLP. You should not act or refrain from acting on the basis of any content included in this email without seeking legal advice. The contents of this email contain general information and may not address your particular situation.

  • “Freelance Isn’t Free” Act Takes Effect May 20, 2024

    On November 22, 2023, New York State Governor Kathy Hochul signed into law the “Freelance Isn’t Free” Act (the “Act”), which is set to take effect on May 20, 2024. The Act requires a party retaining services from a freelance worker to provide the freelance worker with a written contract if the freelance work is worth at least $800, inclusive of multiple projects, over a 120-day period.

    Under the Act, a “freelance worker” is defined as “any natural person or organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services” in exchange for compensation.   Hence, the Act applies only to situations where a business retains the services of an individual to perform certain work for the business, whether the individual performs the work under a corporate or trade name, or their own individual legal name. Nevertheless, the Act provides that the following individuals are not considered freelance workers: (1) attorneys, (2) licensed medical professionals, (3) sales representatives, and (4) construction contractors.

    The Act defines a “construction contractor” as “any person, sole proprietor, partnership, firm, corporation, limited liability company, association  or other legal entity who by oneself or through others offers to undertake, or holds oneself out as being able to undertake, or does undertake a construction project.” Moreover, the Act defines a “construction project"  as “the  providing  of  any  labor or services, and the use of any materials or equipment in order to alter, build, excavate, add to, subtract from, improve, repair, maintain, renovate, move, wreck or demolish any bridge, building, highway, road, railroad, land, tunnel, sewer, drainage or other structure, project, development,  or improvement, or the doing of any part thereof, including the erection of scaffolding or other structures or works in connection therewith.”

    The written contract between a freelance worker, as defined by the Act, and the hiring party must, at a minimum, specify (1) the parties’ names and mailing addresses; (2) an itemization of all services to be provided by the freelance worker, the value of the services to be provided pursuant to the contract, and the rate and method of compensation; (3) the date on which the hiring party must pay the contracted compensation or the mechanism by which such date will be determined; and (4) the date by which a freelance worker must submit a list of services rendered to the hiring party in order to meet any internal processing deadlines for the purposes of timely compensation by the agreed-upon date. In addition, the Act also sets a 30-day deadline for payment in full unless another time frame is agreed to.

    Under the Act, the hiring party must not retaliate or take any action that is reasonably likely to deter a freelance worker from exercising or attempting to exercise any right under the Act. Once a freelance worker has commenced performance of the services under the contract, the hiring party cannot require as a condition of timely payment that the freelance worker accept less compensation than the amount of the contracted compensation.  The hiring party is required to keep a copy of its contracts subject to the act for a period of no less than six years and make such contract available to the commissioner upon request. The failure of a hiring party to produce the contract, upon request of the commissioner, gives rise to a presumption that the terms that the freelance worker has presented are the agreed upon terms. Freelance workers may file a complaint with the State Department of Labor (the “DOL”) for violations of the law.  Additionally, a freelance worker may file a civil action in any court of competent jurisdiction for damages, which would be subject to a six-year statute of limitations.

    In sum, the Act provides that a party retaining services from a freelance worker (as defined in the Act) must provide the freelance worker with a written contract and failure to do so can leave the hiring party vulnerable to the terms the freelance worker presents to the DOL and/or subject the hiring party to certain violations by the DOL.

    If you have questions about the Act, please contact one of our partners: Matthew S. Quinn, at (212) 447-5510 or This email address is being protected from spambots. You need JavaScript enabled to view it., Christopher P. McCabe, at (212) 447-5520 or This email address is being protected from spambots. You need JavaScript enabled to view it., Simon Block, at (212) 447-5530 or This email address is being protected from spambots. You need JavaScript enabled to view it., or Jonathan Krukas, at (212) 447-5560 or This email address is being protected from spambots. You need JavaScript enabled to view it..

    The information contained in this email is provided for informational purposes only, should not be construed as legal advice on any subject matter, and does not create an attorney-client relationship between you and Quinn McCabe LLP. You should not act or refrain from acting on the basis of any content included in this email without seeking legal advice. The contents of this email contain general information and may not address your particular situation.

  • Quinn McCabe LLP Scores Victory For Developers in Appellate Division

    Quinn McCabe LLP recently obtained a favorable ruling in the Appellate Division, First Department which will benefit developers in future license agreement negotiations and RPAPL § 881 Actions. Specifically, In the Matter of 419 Partners LLC v. Eli Zabar et al., Index No. 156867/2021, Case No. 2022-00982, the First Department ruled in favor of the developer’s position that neighbors are not entitled to an award of professional fees when a license is not actually awarded. The ruling incentivizes neighbors to reach resolution on access issues rather than opposing them, lest they be required to pay their own professional fees.
     
    David M. Peraino, Esq., a partner of the firm, successfully argued that the plain wording of RPAPL 881 does not authorize the award of professional fees to a neighbor without the award of a license. Specifically, Mr. Peraino argued that although the statute provides that a license may be granted “upon such terms as justice requires”, when a license is not granted, the statute does not allow for equitable relief, including a neighbor’s legal and engineering fees. Mr. Peraino further noted that the relief was both consistent with First Department precedent, and achieved the equitable balance favored by courts: given that a neighbor would not be burdened with a license, a developer should not have to pay their fees. The trial court agreed, and the First Department unanimously affirmed.
     
    The decision is an important one in the ever-changing landscape of access agreement negotiations and litigations as it disincentives neighbors from focusing their efforts on opposing access requests. Neighbors inclined to do so will face a best-case scenario that they temporarily stave off access, but in the process, incur potentially significant legal and engineering fees which will not be reimbursed by the developer, as is often the case. Rational neighbors are likely to either grant access to a developer pursuant to amicable negotiations, or, in responding to an RPAPL 881 petition, seek favorable access terms rather than opposing the award of a license.

    If you have questions about these developments, please contact one of our partners: Matthew S. Quinn, at (212) 447-5510 or This email address is being protected from spambots. You need JavaScript enabled to view it., Christopher P. McCabe, at (212) 447-5520 or This email address is being protected from spambots. You need JavaScript enabled to view it., Simon Block, at (212) 447-5530 or This email address is being protected from spambots. You need JavaScript enabled to view it., Jonathan Krukas, at (212) 447-5560 or This email address is being protected from spambots. You need JavaScript enabled to view it..






  • Quinn McCabe LLP Scores Another Huge Victory For Developers

    Quinn McCabe LLP recently made precedent in the RPAPL Section 881 context, obtaining a decision which should give neighbors pause before engaging in tactics designed to delay a project owner’s access to the neighbor’s property. Specifically, In the Matter of 419 Partners LLC v. Eli Zabar et al., Index No. 156089/2022, Justice Andrea Masley of the Commercial Division determined for the first time that the neighbor required to provide access to its property pursuant to a court-ordered license must pay certain professional fees of the project owner.
     
    David M. Peraino, Esq., a partner of the firm, and Wendy Chavez, Esq., an associate of the firm, successfully argued that the respondent-neighbors engaged in delay tactics and other bad faith conduct to delay the petitioner-developer’s construction project, and that, in such circumstances, the plain wording of RPAPL Section 881 authorizes a Court to require the neighbor to reimburse the project owner for certain of its professional fees. Specifically, the Court held as follows:
     
    “Petitioner’s request for fees is granted because respondents have interfered with a development project essential to the community: providing homeless services during a crisis…While petitioner is not entitled to reimbursement of all of its fees, it will be reimbursed for the excessive fees it was compelled to incur.”
     
    The Court justified its decision by noting that “respondents have engaged in bad faith efforts to delay the Project”, otherwise engaged in “shameful tactics that were anything but good faith”, and made misrepresentations to the Court. Justice Masley also rejected the neighbor’s request for reimbursement of its attorneys’ and other professional fees, and awarded the respondent a license fee of just $500 per month.
     
    This decision should send a powerful message to neighbors not to abuse the license agreement negotiation process. A neighbor opposing a request for a license to access its property often has minimal incentive to engage in good faith negotiations, as many RPAPL 881 proceedings result in the project owner being ordered to reimburse the neighbor for its professional fees irrespective of the neighbor’s conduct. Even in the worst case scenario, a recalcitrant neighbor simply was not awarded reimbursement of its professional fees.   As a result of this decision, however, a neighbor is strongly incentivized to engage in good faith negotiations, knowing that its failure to do so could lead to an order requiring the neighbor to reimburse a project owner for a portion of the project owner’s professional fees.


    If you have questions about these developments, please contact one of our partners: Matthew S. Quinn, at (212) 447-5510 or This email address is being protected from spambots. You need JavaScript enabled to view it., Christopher P. McCabe, at (212) 447-5520 or This email address is being protected from spambots. You need JavaScript enabled to view it., Simon Block, at (212) 447-5530 or This email address is being protected from spambots. You need JavaScript enabled to view it., Jonathan Krukas, at (212) 447-5560 or This email address is being protected from spambots. You need JavaScript enabled to view it..