Vermont Statutes Title 9 Sec. 4005a
Terms Used In Vermont Statutes Title 9 Sec. 4005a
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Contract: A legal written agreement that becomes binding when signed.
- Contractor: means a person or entity that contracts with an owner to perform work, or provide materials or machinery necessary to perform work on real property. See
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Owner: includes successors in interest of the owner and agents of the owner acting within their authority. See
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Real property: means real estate, including lands, leaseholds, tenements and hereditaments, and improvements placed thereon. See
- State: when applied to the different parts of the United States may apply to the District of Columbia and any territory and the Commonwealth of Puerto Rico. See
- Subcontractor: means any person or entity that has contracted to perform work, or provide materials or machinery necessary to perform work for a contractor or another subcontractor in connection with a construction contract. See
- Trustee: A person or institution holding and administering property in trust.
§ 4005a. Fund held in trust; commingling; no effect on title to real property
(a) As used in this section:
(1) “Claim” means any valid claim for materials furnished or services rendered in the construction, repair, remodeling, improvement, or renovation of any building or structure for which the claimant has a lien or the right to claim a lien.
(2) “Express trust” means funds that have been paid by an owner, for or in connection with services, labor, or materials used in an improvement of real property, which are to be held by a contractor or subcontractor, in express trust, for those services, labor, or materials. Any such contractor or subcontractor who accepts money from any owner or contractor shall become the trustee of the express trust that is created pursuant to this section. The amounts received by such contractor or subcontractor under or in connection with each building project shall be a separate trust and the contractor or subcontractor, or any successor or assign or both of such contractor or subcontractor that hold such trust funds, shall be a trustee thereof. These funds are not required to be held in any separate account by a contractor or subcontractor. Such trust shall be effective against and shall have priority over any unsecured interest of a party seeking payment from such contractor or subcontractor for claims other than those that are due and owing by reason of the specific building project for which the trust was created, whether such creditors are foreign attachment or other judicial lien creditors, a trustee in bankruptcy, or similar creditors or representatives or creditors of the contractor or subcontractor.
(b) Funds held in express trust are not required to be held in any separate account by a contractor or subcontractor.
(c) No express trust shall be required for a federal, State, or municipal project.
(d) The amount payable to any contractor or subcontractor under any contract for the construction, repair, remodeling, improvement, or renovation of any building or structure shall, upon receipt by such contractor or subcontractor, be held in express trust by such contractor or subcontractor for the payment of all claims that are due and owing, or to become due and owing, by such contractor or subcontractor by reason of such construction, repair, remodeling, improvement, or renovation.
(e) Any amount required to be held in express trust under this section shall be applied to the payment of the corresponding claims specified in this section.
(f) Nothing in this section shall be construed to create a lien on real property. The existence of an express trust under this section shall not prohibit the filing or enforcement of a lien against the affected real property pursuant to chapter 51 of this title by any claimant. A priority lien of a secured lender shall not be subordinate to an express trust.
(g) In the case of an express trust that is not held by a corporation, limited liability partnership, or limited liability company, liability for sums due under this section shall only attach to the principal or head of the company which holds the funds under the express trust. (Added 2007, No. 211 (Adj. Sess.), § 2; amended 2021, No. 20, § 34.)