Relating to the beneficiaries of trust funds paid or received in connection with an improvement on specific real property.

Contracts

• Decouple Assignments: You must remove clauses assigning trust fund rights from your standard Subcontracts and Master Service Agreements (MSAs). The law explicitly voids assignments contained within the original construction contract.
• Create Standalone Instruments: Legal counsel must draft a separate "Deed of Assignment of Trust Funds" template that is only executed *after* funds are exchanged.
• Review Factoring Agreements: If you utilize factoring, your agreements must be reviewed. Third-party lenders are no longer "qualified assignees" unless they are already a trustee, beneficiary, or owner on the specific project.

Hiring/Training

• Accounts Receivable/Payable Training: Staff must be trained that they cannot accept or issue an assignment of trust funds based on a promise to pay. Payment must be verified first.
• Project Management: Project Managers must be trained to identify incoming notices of assignment within the 7-day window to verify the claimant's standing.

Reporting & Record-Keeping

• The 7-Day Notice Protocol: You must implement a workflow to send written notice of assignment to both the Property Owner and the Contractor within 7 days of the assignment. Failure to do so voids the trust fund claim.
• Audit Trail: Maintain proof of delivery (Certified Mail/Courier) for the notices.
• Proof of Consideration: Retain wire receipts or cleared checks proving the assignee paid "good and sufficient funds" to the beneficiary *before* the assignment document was signed.

Fees & Costs

• Legal Spend: One-time cost to redraft contract templates and assignment forms.
• Financing Liquidity: Potential indirect cost; as third-party lenders lose Trust Fund Act protections, borrowing costs or factoring fees for subcontractors may increase due to higher lender risk.