The sentence “the Contractor shall exercise the priority of compensation for the construction project price within a reasonable period” is added to this article, and the period for exercising the priority of compensation is extended from six months to eighteen months.
In addition, the construction project price that cannot be compensated preferentially includes the interest of overdue payment of the project price, liquidated damages, damages and other losses caused by the employer’s breach of contract.
The “contract number” and “signing date” must be stated in the construction contract.
Article 39 If the quality of the uncompleted construction project is qualified, and the contractor requests the price of the construction project to be repaid in priority with the price converted or auctioned for the part of the construction project, the people’s court shall support it.
It can be seen that the qualified construction project quality is the prerequisite for the contractor to exercise the priority of compensation for the construction project price, and when the construction project quality is qualified, the contractor has the priority of compensation no matter whether the project has been completed or not.
In addition, Article 37 of the judicial interpretation (I), if the decoration project meets the conditions of discount or auction, and the contractor of the decoration project requests the project price to be paid in priority with respect to the price of the discount or auction of the decoration project, the people’s court shall support it.
1、 If the subject exercising the right of priority to compensation, according to Article 35 of the judicial interpretation (I), enters into a construction contract with the employer and requests the contractor to receive priority compensation from the price of the project converted or auctioned in accordance with Article 807 of the civil code, the people’s court shall support it.
In judicial practice, it is a difficult problem how to judge that the waiver or restriction of the right of priority compensation has damaged the interests of construction workers.
It can be seen that the contractor has the right to waive or restrict the exercise of the right of priority compensation, but it shall not damage the interests of construction workers.
The people’s court shall not support the Contractor’s claim for priority compensation for interest, liquidated damages and damages for overdue payment of the construction project price.
5、 Waiver or restriction of exercise according to Article 42 of the judicial interpretation (I), if the employer and the contractor agree to waive or restrict the priority of compensation for the construction project price, which damages the interests of construction workers, and the employer claims that the Contractor does not enjoy the priority of compensation for the construction project price according to the agreement, the people’s court will not support it.
Firstly, the contractor should first review whether it has the right of priority compensation: the construction enterprise needs to review the construction contracts of all projects, especially some construction contracts that have been completed, terminated or disputed, and review and select the construction contracts that can exercise the right of priority compensation.
This article is greatly changed from the original judicial interpretation (II) (implemented on February 1, 2019 and now invalid), which is also the focus of revision in this judicial interpretation.
6、 Specific suggestions 1.
2.
It can be seen that the subject enjoying the priority of compensation is only the contractor who has signed the construction contract with the employer, excluding the surveyor, designer, actual constructor, sub contractor and legal subcontractor.
It can be seen that the construction project price that can be compensated preferentially includes labor cost, material cost, use cost of construction machines and tools, enterprise management fee, profit, fees and taxes.
Clarify the exercise content: when the construction enterprise exercises the priority of compensation to the employer, whether in written form, electronic form or face-to-face form, it must clarify the exercise content, at least reflect “which construction contract for which project exercises the priority of compensation”, and the project shall at least state the name, location, scope, project price Whether the completion acceptance has been completed, whether the settlement has been completed, and whether the project quality is qualified.
2、 Exercise period according to Article 41 of the judicial interpretation (I), the Contractor shall exercise the priority right of compensation for the construction project price within a reasonable period, but the maximum period shall not exceed 18 months, which shall be calculated from the date when the Contractor shall pay the construction project price.
Generally, it needs to be judged comprehensively in combination with the Contractor’s balance sheet, the Contractor’s ability to pay, whether it is actually in arrears with the workers’ wages, whether there are other effective safeguard measures for the payment of workers’ wages, etc, Simply defaulting on the wages of one or more workers does not prove that the abandonment or restriction has damaged the interests of construction workers.
The scope of priority compensation for the Contractor’s construction project price shall be determined in accordance with the provisions of the relevant administrative department under the State Council on the scope of construction project price.
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4、 The scope of exercise is the same as Article 40 of the judicial interpretation (I).
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Otherwise, the waiver or restriction is invalid.
The Contractor shall pay attention to the timely exercise of the right: for the construction contract that can exercise the priority of compensation, the construction enterprise shall exercise the priority of compensation to the employer before the expiration of the priority of compensation.
It should be noted that the duration of the exercise is 18 months: it should be noted that the “18 months” here belongs to the “exclusion period” in law, and it will not be suspended or interrupted due to the COVID-19 and related epidemic prevention and control measures.
3、 Preconditions for exercise according to Article 38 of the judicial interpretation (I), if the quality of the construction project is qualified and the contractor requests the price of the construction project to be repaid preferentially based on the price converted or auctioned by the project, the people’s court shall support it.
By comparison, the provisions described in this article delete the sentence “except that the employer of the decoration project is not the owner of the building” in the original judicial interpretation (II) (implemented on February 1, 2019 and now invalid).
Therefore, the contractor who enjoys the right of priority compensation shall exercise the right in time, otherwise, the right of priority compensation will be eliminated due to overdue exercise, which will affect his own legitimate rights and interests.
