Connecticut General Statutes 42-158p – Retainage escrow accounts. Monthly reports. Combining accounts. Termination of accounts. Fees and expenses. Form and provision of account. Failure to deposit or release retainage. Acceptance of securities
An escrow account shall be established for all retainage, subject to the following:
Terms Used In Connecticut General Statutes 42-158p
- banks: shall include all incorporated banks. See Connecticut General Statutes 1-1
- Contract: A legal written agreement that becomes binding when signed.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- month: means a calendar month, and the word "year" means a calendar year, unless otherwise expressed. See Connecticut General Statutes 1-1
(a) An escrow account shall be established in state or national banks domiciled in this state or in savings and loan associations domiciled in this state.
(b) The owner shall provide a monthly report to the contractor as to the value of the retainage being held in the escrow account and any additions to or payments from the escrow account. Upon request by a subcontractor, the contractor shall make such monthly report available for review by the subcontractor. Withdrawals from the escrow account shall be made only subject to approval of the owner.
(c) If the owner has entered into more than one construction contract with the same contractor requiring the maintenance of escrow accounts, the owner may elect to combine the amounts held as retainage under each contract into one or more escrow accounts or may establish a separate escrow account for each contract.
(d) The escrow account shall be terminated upon substantial or final completion of all work in accordance with the terms of the construction contract and full payment to the contractor.
(e) All fees and expenses related to maintaining the escrow account shall be paid by the owner.
(f) The form and provisions of the escrow account shall be included in all solicitations for construction services and shall be provided to the contractor and subcontractor prior to entering into a contract with the owner. Upon request by a subcontractor, the contractor shall make such form and provisions available for review by the subcontractor. Failure to comply with the provisions of this subsection shall not give rise to a defense to the enforcement of a contract.
(g) If an owner fails to deposit retainage that is withheld or to release retainage as required by public act 03-167*, the owner shall pay to the contractor an additional one and one-half per cent of the amount not deposited or released for each month or fraction of a month, until the retainage amount is paid in full.
(h) An owner may accept securities in lieu of retainage from a contractor and a contractor may accept securities in lieu of retainage from a subcontractor.
(i) For the purposes of this section, “owner” means “owner”, as defined in subdivision (1) of section 42-158i.