Requires prompt payment of certain construction contracts.
Sponsored by: Assemblyman WAYNE P. DEANGELO District 14 (Mercer and Middlesex)
This bill amends section 2 of P.L.1991, c.133 (C.2A:30A-2), which provides for the prompt payment of a prime contractor, subcontractor, or subsubcontractor in connection with a public or private contract. This bill requires, with regard to a contract for the improvement of real property, that all money paid by an owner to a prime contractor, by a prime contractor to a subcontractor, or by a subcontractor to a subsubcontractor, constitutes a trust fund in the hands of the prime contractor, subcontractor, or subsubcontractor, until all claims for labor, materials and other charges incurred in connection with the performance of the contract have been fully paid.
The bill prohibits any contract for the improvement of real property to include a provision allowing any party to the contract to deviate from the imposition of a trust fund as required by the bill.
The bill also provides that in the event of any violation, misuse, diversion, or any other unlawful use of all or part of the trust funds by a corporate entity, the responsibilities of maintaining and discharging the trust funds shall accrue personally to any corporate officer of the prime contractor, subcontractor, or subsubcontractor and the corporate officer shall be held personally liable for participation in the corporate entity’s wrongdoing even if the corporate officer derived no personal benefit.