Construction contracts signed by revitalization districts after this law takes effect must let contractors and subcontractors suspend work or end the contract, after written notice, when certified and approved amounts go unpaid, with reasonable attorney fees and costs awarded to the successful party in any action or arbitration to enforce these rights.
Official title: construction contracts; revitalization districts
- September 12, 2026
- Applies to contracts signed after the law takes effect: Revitalization district infrastructure construction contracts executed after the effective date
What changes
BeforeA revitalization district could enter into contracts and spend money for infrastructure. The text shows no required payment terms for its construction contracts.
NowAny construction contract a revitalization district enters into must include a set list of provisions on nonpayment, suspension of work, termination, attorney fees and how written notice is given.
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NowA contractor may suspend work or end the contract if the district does not pay certified and approved amounts on time. The contractor must give the district written notice at least 7 calendar days ahead, unless the contract sets a shorter period. The contractor is not considered in breach, and the contract cannot lengthen this notice period.
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NowA subcontractor may suspend work or end its contract in 3 situations. (1) If both the district and the contractor fail to pay for its certified and approved work, it needs 3 calendar days' written notice. (2) If the district paid on time but the contractor did not pay the subcontractor, it needs 7 calendar days' notice. (3) If the district declines to approve and certify billing for the subcontractor's work for reasons not the subcontractor's fault or directly related to its work, it needs 7 calendar days' notice. In each case, notice goes to the contractor and the district, a shorter period may apply if the contract sets one, and the subcontractor is not considered in breach.
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NowA contractor or subcontractor that suspends work may stop providing labor, materials or services until it is paid the certified and approved amount, plus reasonable costs for shutting down and restarting the project.
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NowIn any lawsuit or arbitration to enforce these rights, the successful party must be awarded reasonable attorney fees and costs. Written notice counts as given if it is delivered in person to the intended individual, member or officer, or sent by a method with third-party proof of delivery to the last known business address. The text names that address as the address of the party giving notice.
Who it affects
- Contractors on revitalization district construction projects
- Subcontractors on revitalization district construction projects
- Revitalization districts
- Municipalities that form revitalization districts
What you need to do
Nothing.
What the law doesn't answer
- What counts as a "timely" payment by the district or contractor
- Whether contracts signed before the effective date are affected in any way
- What happens if a district construction contract leaves out the required provisions
- Whether the reference to the notice-giver's own business address is intended, or whether it was meant to be the recipient's address
- How many revitalization districts exist or how many contracts this covers
This summary describes the law as enacted. Later laws, court rulings or referendum petitions can change the picture. Check the official text for the current wording.