Vermont exempts dealers from retainage
The consumer protection bill (H. 593), passed in the Vermont Legislature earlier this month, has become law.
The bill contained several protections for consumers and businesses as well as language the Vermont Retail Lumber Dealers Association (VRLDA) crafted to exempt materialmen, or pro dealers, from retainage.
Retainage represents a pre-approved amount of a contract that is withheld until the work is substantially complete in order to ensure that the contractor or subcontractor will satisfy its obligations to the project.
“This is an important victory for Vermont’s independently-owned and operated building material dealers,” said Josh Druke, chair of VRLDA’s legislative committee. “Retainage is something our association has been working on for the last three years.”
VRLDA worked with the Northeastern Retail Lumber Association’s (NRLA) legislative and advocacy department in order to produce the language included in the bill. The consumer protection bill will go into effect on July 1 but will not apply to current contracts.
“While it is common sense to exempt materialmen from retainage since their obligations to a construction project end when the materials are delivered, it often takes time to explain the nuances of construction material delivery to elected officials,” explained Jeff Keller, NRLA’s director of legislative affairs. “We hope this law will spur additional states in the Northeast to enact the retainage exemptions we’ve been advocating for, for many years.”
The enactment of H. 593 makes Vermont the first state in the Northeast to explicitly exempt materialmen from retainage.
Builders and owners in many states properly apply retainage to labor and not materials, but the NRLA has seen the issue of applying retainage to materialmen recently increasing in certain states, such as Vermont and New York, prompting the needs for legislation, the association said.
The bill contained several protections for consumers and businesses as well as language the Vermont Retail Lumber Dealers Association (VRLDA) crafted to exempt materialmen, or pro dealers, from retainage.
Retainage represents a pre-approved amount of a contract that is withheld until the work is substantially complete in order to ensure that the contractor or subcontractor will satisfy its obligations to the project.
“This is an important victory for Vermont’s independently-owned and operated building material dealers,” said Josh Druke, chair of VRLDA’s legislative committee. “Retainage is something our association has been working on for the last three years.”
VRLDA worked with the Northeastern Retail Lumber Association’s (NRLA) legislative and advocacy department in order to produce the language included in the bill. The consumer protection bill will go into effect on July 1 but will not apply to current contracts.
“While it is common sense to exempt materialmen from retainage since their obligations to a construction project end when the materials are delivered, it often takes time to explain the nuances of construction material delivery to elected officials,” explained Jeff Keller, NRLA’s director of legislative affairs. “We hope this law will spur additional states in the Northeast to enact the retainage exemptions we’ve been advocating for, for many years.”
The enactment of H. 593 makes Vermont the first state in the Northeast to explicitly exempt materialmen from retainage.
Builders and owners in many states properly apply retainage to labor and not materials, but the NRLA has seen the issue of applying retainage to materialmen recently increasing in certain states, such as Vermont and New York, prompting the needs for legislation, the association said.