Section 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.