Earlier this year, Gov. Roy Cooper signed legislation that, among other things, prohibits waivers of future claims for progress payments on construction contracts.
The bill, SB 219, adds a new section to Article 1 of Chapter 22B of the General Statutes, Section 22B-5, which states, “Provisions in lien waivers, releases, construction agreements as defined in G.S. 22B-1(f)(1), or design professional agreements as defined in G.S. 22B-1(f)(5) purporting to require a promisor to submit a waiver or release of liens or claims as a condition of receiving interim or progress payments due from a promise under a construction agreement or design professional agreement are void and unenforceable unless limited to the specific interim or progress payment actually received by the promisor in exchange for the lien waiver.”
The new law does not apply to:
- Lien waivers or releases for final payments
- Agreements to settle and compromise disputed claims after the claim has been identified by the claimant in writing regardless of whether the promisor has initiated a civil action or arbitration proceeding.
The bill went into effect March 1, 2022, and applies to liens attached on or after March 1, 2022.