Coops and condo associations in New York City hire individuals and businesses to perform various services.
Some are professional businesses with a service contract to fix and replace HVAC, wash windows or care for the landscape. Others may be individuals doing one-off tasks. For instance, the building may hire a freelance handyperson to replace or repair a light fixture in the common area or even someone to shovel snow.
Many times individual owners will hire someone to do a simple project in their apartments. Both need to be aware of a New York City Law called “The Freelance is not Free Act” which governs contracts with these type of independent contractors.
The Freelance Is Not Free Act
Taking effect in 2017, this New York City law seeks to protect the rights of freelance workers, particularly those performing one-off, short-term or low-level tasks. While it excludes employees, sales personnel, licensed attorneys, and licensed medical professionals, it applies to independent contractors (working as individuals or incorporated as a business) paid more than $800 from a single contract/job or an aggregate of several contacts for services within the previous 120 days for any services provided.
What goes into a valid contract?
Even for these small jobs, the parties are required to have a written contract. It should include:
- The hiring party’s and freelancer’s name and mailing address
- A list of services requested
- The amount of compensation for the services
- The due date for payment (the law requires payment to freelancers within 30 days of the completion of the work unless a different date is agreed to tin the contract)
Any contract not meeting these guidelines is void and the failure to provide a contract is grounds alone for a lawsuit. Failing to pay a freelancer governed by this act can result in substantial cost to the party who hired them.
There are different statute of limitations applicable to different claims under the act but a contractor may have up to 6 years to bring suit for violation of the act.
Penalties are worth noting
Penalties can be substantial and add up. While violation of the written contract provision has a fine of $250, there are other provisions which allow plaintiff to recover double the value of the contract. The statute provides that a successful plaintiff shall be awarded attorneys fees and costs; a number which could easily be well in excess of the contract amount.
Many don’t realize it exists
Despite this law being five years old, many are unaware of it. Co-op and Condo boards, management companies and individual shareholders, unit owners and renters must be careful and avoid these disputes and we suggest that counsel familiar with this law be checked any time a contractor is being used to do this type of freelance work.
On the flip side, independent contractors can also take heart, knowing that they have legal recourse in the event a customer does not follow the law. Many of these claims would easily fall within the $10,000 small claims limit allowed in New York City Small Claims court.