Bill Text: MN HF952 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Building and construction contracts regulated, and retainage required to be held in escrow or trust accounts until released.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2014-03-03 - Author added Davids [HF952 Detail]
Download: Minnesota-2013-HF952-Introduced.html
1.2relating to commerce; regulating building and construction contracts; requiring
1.3retainage to be held in escrow or trust accounts until released;amending
1.4Minnesota Statutes 2012, section 337.10, subdivision 4.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 337.10, subdivision 4, is amended to read:
1.7 Subd. 4. Progress payments and retainages. (a) Unless the building and
1.8construction contract provides otherwise, the owner or other persons making payments
1.9under the contract must make progress payments monthly as the work progresses.
1.10Payments shall be based upon estimates of work completed as approved by the owner or
1.11the owner's agent. A progress payment shall not be considered acceptance or approval of
1.12any work or waiver of any defects therein.
1.13(b) Unless the building and construction contract provides otherwise, an owner or
1.14owner's agent may reserve as retainage from any progress payment on a building and
1.15construction contract an amount not to exceed five percent of the payment. An owner or
1.16owner's agent may reduce the amount of retainage and may eliminate retainage on any
1.17monthly contract payment if, in the owner's opinion, the work is progressing satisfactorily.
1.18Retainage reserved pursuant to this subdivision must be held in an interest-bearing escrow
1.19or trust account with a bank or trust company having its principal place of business in the
1.20state. Within 30 days after substantial completion of all work required by the contract, the
1.21reserved retainage and interest must be released by the owner or the owner's agent and
1.22paid to the persons from whom the retainage was reserved.
1.23(c) This subdivision does not apply to contracts for professional services as defined
1.24in sections326.02 to
326.15 .
2.1(d) For purposes of this subdivision, "substantial completion" means the date when
2.2the work is sufficiently completed so that the owner or the owner's representative can
2.3occupy or use the work for the intended purpose.
1.3retainage to be held in escrow or trust accounts until released;amending
1.4Minnesota Statutes 2012, section 337.10, subdivision 4.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 337.10, subdivision 4, is amended to read:
1.7 Subd. 4. Progress payments and retainages. (a) Unless the building and
1.8construction contract provides otherwise, the owner or other persons making payments
1.9under the contract must make progress payments monthly as the work progresses.
1.10Payments shall be based upon estimates of work completed as approved by the owner or
1.11the owner's agent. A progress payment shall not be considered acceptance or approval of
1.12any work or waiver of any defects therein.
1.13(b) Unless the building and construction contract provides otherwise, an owner or
1.14owner's agent may reserve as retainage from any progress payment on a building and
1.15construction contract an amount not to exceed five percent of the payment. An owner or
1.16owner's agent may reduce the amount of retainage and may eliminate retainage on any
1.17monthly contract payment if, in the owner's opinion, the work is progressing satisfactorily.
1.18Retainage reserved pursuant to this subdivision must be held in an interest-bearing escrow
1.19or trust account with a bank or trust company having its principal place of business in the
1.20state. Within 30 days after substantial completion of all work required by the contract, the
1.21reserved retainage and interest must be released by the owner or the owner's agent and
1.22paid to the persons from whom the retainage was reserved.
1.23(c) This subdivision does not apply to contracts for professional services as defined
1.24in sections
2.1(d) For purposes of this subdivision, "substantial completion" means the date when
2.2the work is sufficiently completed so that the owner or the owner's representative can
2.3occupy or use the work for the intended purpose.
