Rhode Island General Laws 34-27.2-4. Funds held in trust
(a) Any moneys paid under a contract by an owner to a contractor, or by the owner or contractor to a subcontractor, for work done for or about a building by any subcontractor shall be held in express trust by the contractor or subcontractor, as trustee, for those subcontractors who did work for or about the building, for purposes of paying those subcontractors or any successor and/or assign of such contractor or subcontractor that hold such funds.
Terms Used In Rhode Island General Laws 34-27.2-4
- Contract: A legal written agreement that becomes binding when signed.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Trustee: A person or institution holding and administering property in trust.
(b) Any money paid under a contract by an owner to a contractor, or by the owner or contractor to a subcontractor, for supplies provided by materialmen in contract for the construction, repair, remodeling, improvement or renovation of any building or structure shall be held in an express trust by the contractor or subcontractor for the materialmen or any successor and/or assign of such contractor or subcontractors that holds such trust funds.
(c) Nothing contained in this chapter shall be construed as requiring moneys held in express trust by a contractor or subcontractor under subsection (a) or (b) of this section to be placed in a separate account.
(d) The existence of trust funds shall not prohibit the filing or enforcement of a labor, mechanic or material men’s lien against the affected real property by any lien claimant, nor shall the filing of such a lien release the holder of the funds from the obligations created under Rhode Island law.
History of Section.
P.L. 2007, ch. 150, § 1; P.L. 2007, ch. 288, § 1.