Retainage in construction - Revision history

Designing Buildings at 08:48, 20 December 2020

2020-12-20T08:48:25Z

← Older revision		Revision as of 08:48, 20 December 2020
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	* The problems with retention.		* The problems with retention.

−	[[Category:International]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:International]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]]

Designing Buildings: moved Retainage to Retainage in construction

2019-02-12T17:07:06Z

moved Retainage to Retainage in construction

← Older revision

Revision as of 17:07, 12 February 2019

Designing Buildings at 17:06, 12 February 2019

2019-02-12T17:06:51Z

← Older revision		Revision as of 17:06, 12 February 2019
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	As an alternative to retainage, the contractor may deposit securities, and any interest accrued is then paid to the contractor.		As an alternative to retainage, the contractor may deposit securities, and any interest accrued is then paid to the contractor.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Building codes.		* Building codes.

Editor at 16:57, 15 August 2018

2018-08-15T16:57:22Z

← Older revision		Revision as of 16:57, 15 August 2018
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	* Substantial completion.		* Substantial completion.
	* Surety.		* Surety.
		+	* The problems with retention.

	[[Category:International]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]]		[[Category:International]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]]

Designing Buildings at 07:16, 3 August 2018

2018-08-03T07:16:13Z

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	It is important that retainage is a fair amount, and that it is equitable, that is, that the amount withheld from subcontractors by the main contractor should not be greater than the amount withheld from the main contractor by the client. In addition, clients should release the retainage promptly once the work has been completed and accepted; and similarly, the main contractor must make prompt payment of the retainage to subcontractors.		It is important that retainage is a fair amount, and that it is equitable, that is, that the amount withheld from subcontractors by the main contractor should not be greater than the amount withheld from the main contractor by the client. In addition, clients should release the retainage promptly once the work has been completed and accepted; and similarly, the main contractor must make prompt payment of the retainage to subcontractors.
		+
		+	In some contracts, the percentage of retainage will decrease as the work progresses to reflect the fact that the likelihood of failure to complete has also decreased. If payments are not made promptly, interest may be charged.
		+
		+	As an alternative to retainage, the contractor may deposit securities, and any interest accrued is then paid to the contractor.

	= Find out more =		= Find out more =

Designing Buildings at 07:11, 3 August 2018

2018-08-03T07:11:57Z

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−	In the United States, retainage is an amount of money withheld from progress payments to ensure that the construction work is completed. The UK equivalent is known as ‘retention’.	+	In the United States, retainage is an amount of money withheld from progress payments to ensure that the construction work is completed. It acts as an incentive for the supply chain to fulfil all of their obligations under a contract, and provides a reserve of money to be drawn on if they do not complete and have to be replaced. The UK equivalent is known as ‘retention’.

−	~~The amount of retainage varies according to the project and the region but it is calculated as a percentage of each interim payment. Typically 5~~-~~10%, the exact amount~~, and ~~conditions for its release, can be negotiated between owners, contractors and subcontractors prior to signing contracts~~.	+	Clients can retain money from main contractors who can in turn retain money from subcontractors who can retain from sub-subcontractors, and so on.

−	Public projects often require retainage to adhere to state laws.	+	The amount of retainage varies according to the project and the region but it is calculated as a percentage of each interim payment. Typically 5-10%, the exact amount, and conditions for its release, can be negotiated between owners, contractors and subcontractors prior to signing contracts. Public projects often require retainage to adhere to state laws.

−	~~Retainage~~ is usually only a small portion of the payments made as the work is carried out ~~but~~ can amount to a sizeable value that can be a strong incentive to complete.	+	Whilst retainage is usually only a small portion of the payments made as the work is carried out, it can amount to a sizeable total value that can be a strong incentive to complete. However, it also creates cash flow problems for the supply chain, and can take a long time to release. As a result retainage has come under some criticism.

−	Owners can retain money from prime contractors who can in turn retain money from subcontractors who can retain from sub-subcontractors, and so on. The retainage can also act as a reserve of money to be drawn on if one of the parties doesn’t perform the works to contract specification and they have to be replaced at extra cost.	+	It is important that retainage is a fair amount, and that it is equitable, that is, that the amount withheld from subcontractors by the main contractor should not be greater than the amount withheld from the main contractor by the client. In addition, clients should release the retainage promptly once the work has been completed and accepted; and similarly, the main contractor must make prompt payment of the retainage to subcontractors.
−		+
−	It is important that retainage is equitable, ~~i.e.~~ the amount withheld from subcontractors by ~~a general~~ contractor should not be greater than the amount withheld from the ~~general~~ contractor by the ~~owner~~. In addition, ~~owners are required to~~ release the retainage promptly once the work has been completed and accepted; and similarly, the ~~general~~ contractor must make prompt payment of the retainage to subcontractors.	+

	= Find out more =		= Find out more =

Designing Buildings at 06:59, 3 August 2018

2018-08-03T06:59:36Z

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−	In the United States, retainage is an amount of money ~~that is deliberately~~ withheld from ~~each~~ progress ~~payment~~ to ensure that the work is ~~substantially complete~~. The ~~purpose of retainage~~ is ~~to act~~ as ~~an incentive and ensure that the contractor or subcontractor will complete the agreed works and meet their contract obligations~~.	+	In the United States, retainage is an amount of money withheld from progress payments to ensure that the construction work is completed. The UK equivalent is known as ‘retention’.

−	The ~~UK equivalent~~ is ~~known~~ as ~~‘retention’~~.	+	The amount of retainage varies according to the project and the region but it is calculated as a percentage of each interim payment. Typically 5-10%, the exact amount, and conditions for its release, can be negotiated between owners, contractors and subcontractors prior to signing contracts.

−	The amount of retainage varies according to the project and the region but is calculated as a percentage of each interim payment (typically 5-10%). The exact amount can be negotiated between owners, contractors and subcontractors prior to signing private contracts. Public projects often require retainage to adhere to state laws~~, and these will specify the amount and release conditions~~. Retainage is usually only a small portion of the payments made as the work is carried out but can amount to a sizeable value that can be a strong incentive to complete.	+	Public projects often require retainage to adhere to state laws.
		+
		+	Retainage is usually only a small portion of the payments made as the work is carried out but can amount to a sizeable value that can be a strong incentive to complete.

	Owners can retain money from prime contractors who can in turn retain money from subcontractors who can retain from sub-subcontractors, and so on. The retainage can also act as a reserve of money to be drawn on if one of the parties doesn’t perform the works to contract specification and they have to be replaced at extra cost.		Owners can retain money from prime contractors who can in turn retain money from subcontractors who can retain from sub-subcontractors, and so on. The retainage can also act as a reserve of money to be drawn on if one of the parties doesn’t perform the works to contract specification and they have to be replaced at extra cost.

Editor at 16:05, 26 July 2018

2018-07-26T16:05:57Z

← Older revision		Revision as of 16:05, 26 July 2018
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	* Retention held in trust fund.		* Retention held in trust fund.
	* Right to payment.		* Right to payment.
		+	* Stop work order.
	* Subcontractor default insurance (SDI).		* Subcontractor default insurance (SDI).
	* Substantial completion.		* Substantial completion.

Editor at 12:24, 26 July 2018

2018-07-26T12:24:42Z

← Older revision		Revision as of 12:24, 26 July 2018
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	* Holdback.		* Holdback.
	* Interim certificate.		* Interim certificate.
		+	* Mechanic’s lien.
	* Miller Act.		* Miller Act.
	* Practical completion.		* Practical completion.

Editor at 15:42, 25 July 2018

2018-07-25T15:42:33Z

← Older revision		Revision as of 15:42, 25 July 2018
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	* Retention held in trust fund.		* Retention held in trust fund.
	* Right to payment.		* Right to payment.
		+	* Subcontractor default insurance (SDI).
	* Substantial completion.		* Substantial completion.
	* Surety.		* Surety.

	[[Category:International]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]]		[[Category:International]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]]