§ 70. Definition of trusts. 1. The funds described in this section
received by an owner for or in connection with an improvement of real
property in this state, including a home improvement loan, or received
by a contractor under or in connection with a contract for an
improvement of real property, or home improvement, or a contract for a
public improvement in this state, or received by a subcontractor under
or in connection with a subcontract made with the contractor for such
improvement of real property including a home improvement contract or
public improvement or made with any subcontractor under any such
contract, and any right of action for any such funds due or earned or to
become due or earned, shall constitute assets of a trust for the
purposes provided in section seventy-one of this chapter.

For the purposes of this section: (a) any right to receive payment at
a future time shall be deemed a right of action therefor and an asset of
the trust even though it is contingent upon performance or upon some
other event, but the fact that the right is a trust asset does not
enlarge the right or excuse any performance or condition upon which it
depends; (b) "contract" and "subcontract" shall include any modification
of the contract or subcontract to which reference is made; and (c) funds
due or earned under a contract or subcontract shall include any funds
payable to the contractor or subcontractor in addition to the contract
price by reason of any transaction, event or circumstance in the making
or in the performance of the contract or subcontract.

2. The funds received by an owner and the rights of action with
respect thereto, for or in connection with each improvement, shall be a
separate trust and the owner shall be the trustee thereof. The funds
received by a contractor or subcontractor and the rights of action with
respect thereto, under or in connection with each contract or
subcontract, shall be a separate trust and the contractor or
subcontractor shall be the trustee thereof.

3. Every such trust shall commence at the time when any asset thereof
comes into existence, whether or not there shall be at that time any
beneficiary of the trust. The trust of which the owner is trustee shall
continue with respect to every asset of the trust until every trust
claim arising at any time during the improvement has been paid or
discharged, or until all such assets have been applied for the purposes
of the trust. The trust of which a contractor or subcontractor is
trustee shall continue with respect to every asset of the trust until
every trust claim arising at any time prior to the completion of the
contract or subcontract has been paid or discharged, or until all such
assets have been applied for the purposes of the trust. Upon termination
of the trust by payment or discharge of all the trust claims, the
beneficial interest in any remaining assets shall vest in the owner,
contractor or subcontractor, as the case may be.

4. The trusts described in this section shall arise whether or not a
covenant declaring or acknowledging the trust, as required in article
two of this chapter, has been executed.

5. The assets of the trust of which the owner is trustee are the funds
received by him and his rights of action for payment thereof

(a) under a building loan contract;

(b) under a building loan mortgage or a home improvement loan;

(c) under a mortgage recorded subsequent to the commencement of the
improvement and before the expiration of four months after completion of
the improvement;

(d) as consideration for a conveyance recorded subsequent to the
commencement of the improvement and before the expiration of four months
after the completion thereof;

(e) as consideration for, or advances secured by, an assignment of
rents due or to become due under an existing or future lease or tenancy
of the premises that are the subject of the improvement, or of any part
of such premises, if the assignment is executed subsequent to the
commencement of the improvement and before the expiration of four months
after the completion of the improvement or if it is executed before the
commencement of the improvement and an express promise to make an
improvement, or an express representation that an improvement will be
made, is contained in the assignment or given in the transaction in
which the assignment is made;

(f) as proceeds of any insurance payable because of the destruction of
the improvement or its removal by fire or other casualty, except that
the amount thereof required to reimburse the owner for premiums paid by
him out of funds other than trust funds shall not be deemed part of the
trust assets;

(g) under an executory contract for the sale of real property and the
improvement thereof by the construction of a building thereon.

6. The assets of the trust of which a contractor is trustee are the
funds received by him and his rights of action for payment thereof

(a) under the contract for the improvement of real property, or home
improvement or the public improvement;

(b) under an assignment of funds due or earned or to become due or
earned under the contract;

(c) as proceeds of any insurance payable because of destruction of the
improvement of real property including a home improvement or public
improvement or its removal by fire or other casualty, except that the
amount thereof required to reimburse the contractor for premiums paid by
him out of funds other than trust funds shall not be deemed part of the
trust assets.

7. The assets of the trust of which a subcontractor is trustee are the
funds received by him and his rights of action for payment thereof

(a) under the subcontract;

(b) under an assignment or order for the payment of moneys due or
earned or to become due or earned under the subcontract;

(c) as proceeds of any insurance payable because of the destruction of
the improvement of real property or public improvement or its removal by
fire or other casualty, except that the amount thereof required to
reimburse the subcontractor for premiums paid by him out of funds other
than trust funds shall not be deemed part of the trust assets.

8. For the purposes of this article, the term "home improvement
contract" shall have the meaning ascribed to it by section seven hundred
seventy of the general business law, and the term "home improvement
loan" shall mean any loan obtained for the purpose of financing a home
improvement. The term "home improvement" shall mean the repairing,
remodeling, altering, converting, or modernizing of, or adding to
residential property, including but not limited to the construction,
erection, replacement, or improvement of driveways, swimming pools,
siding, insulation, roofing and windows, terraces, patios, landscaping,
fences, porches, garages, solar energy systems, flooring, basements, and
other improvements of the residential property and all structures or
land adjacent to it.