HOUSE DOCKET, NO. 731        FILED ON: 1/14/2015

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1442

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

John J. Lawn, Jr.

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to certain construction contracts.

_______________

PETITION OF:

HOUSE DOCKET, NO. 731        FILED ON: 1/14/2015

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1442

The Commonwealth of Massachusetts

_______________

In the One Hundred and Eighty-Ninth General Court
(2015-2016)

_______________

An Act relative to certain construction contracts.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Chapter 254, Section 2A is hereby amended by inserting after the definition of Design Professional, the following new definition:-

“Due or to become due” and “Due or which later become due”, the amount determined, notwithstanding any breach or termination of the contract, as the difference between (i) the total contract price, whether fixed or estimated, plus the value of all extra work, minus payments made to the contractor as of the date notice of the filing of the subcontract is given by the subcontractor to the owner, and (ii) payments made to other contractors to complete the erection, alteration, repair or removal of the building, structure or other improvement required by such contract, but not attributable to consequential or incidental costs or damages.

SECTION 2. Chapter 254, Section 4 is hereby amended by striking out the last sentence of paragraph 4 and inserting at the end thereof the following new text:-

Such lien shall not exceed the amount due or to become due as defined in section two A under the original contract.

SECTION 3. Chapter 254, Section 4 is hereby amended by striking out the first sentence of paragraph 5 and inserting in place thereof the following new text:-

If the person claiming the lien has no direct contractual relationship with the original contractor, except for liens for labor by persons defined in section one of this chapter, the amount of such lien shall be limited further and shall also not exceed the amount due or to become due as defined in section two A under the subcontract between the original contractor and the subcontractor whose work includes the work of the person claiming the lien unless the person claiming such lien has, within thirty days of commencement of his performance, given written notice of identification by certified mail, return receipt requested to the original contractor in substantially the following form:

SECTION 4. Chapter 254 is hereby amended by inserting at the end thereof the following new section:-

Section 4AA lien under section 4 on a construction project designed to contain at least one but not more than four dwelling units, shall not be limited by the amount due or to become due as defined in section 2A under the original contract unless, prior to making payment to the contractor, the owner obtains from the person claiming the lien a statement set forth in clause 2 of section thirty-two representing that such person has been paid all amounts due for which the owner previously made payment to the contractor. A lien under this section shall not be further limited by the amount due or to become due as defined in section 2A under the subcontract between the original contractor and the subcontractor whose work includes the work of the person claiming the lien unless the contractor obtains from the person claiming the lien a Statement set forth in clause 2 of section thirty-two representing that such person has been paid all amounts due for which the contractor previously made payment to the subcontractor whose work includes the work of the person claiming the lien. Any person asserting that a lien under this section exceeds the amount due or to become due as defined in section 2A, whether under the original contract or a subcontract, shall have the burden of proving the amount due or to become due.

SECTION 5. Chapter 254, Section 32 is hereby amended by inserting at the end of clause (2), the following new text:-

STATEMENT OF AMOUNTS DUE AND PAID

M.G.L.  C. 254, §32

The undersigned, who has a contract with ________________, states the following is an accurate account of the amounts due and paid to the undersigned for furnishing labor or materials, or both labor and materials, or rental equipment, appliances or tools, or performing professional services, for the erection, alteration repair or removal of a building or structure or other improvement of real property known and identified as _________________, located in __________(city or town),  _________County, Commonwealth of Massachusetts, through________________(date):

1.   Original Contract Amount:     _________            

2. Approved Change Orders:      _________            

3. Adjusted Contract Amount:   _________            

    (line 1 plus 2)

4. Completed to Date:                _________            

5. Less Retainage:                      _________            

6. Total Payable to Date:            _________            

    (line 4 less line 5)

7. Less Previous Payments:        _________            

8.Current Amount Due:             _________            

    (line 6 less line 7)

9. Pending Change Orders:        _________            

10. Disputed Claims:                  _________           

SECTION 6.Chapter 254 is hereby amended by adding the following new section:-

Section 34: A contractor on a construction project designed to contain at least one but not more than four dwelling units shall provide written notice to the property owner of the property owners’ rights under Section 4A. The contractor shall also hold all payments received from the property owner in trust, as trustee, for the benefit of the building material suppliers and subcontractors in the amounts of the claims due or to become due or owing from the contractor to the building material suppliers and subcontractors. A contractor who knowingly fails to use the funds held in trust under this section to pay the valid claims of a building material supplier or subcontractor shall be liable to any building material supplier or subcontractor who successfully enforces its rights under this section for all damages sustained by that building material supplier or subcontractor. Any provision in a contract for construction which purports to waive or limit any provisions of this section shall be void and unenforceable.