- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 16 Feb 2018
Retention held in trust fund
Retention is a percentage (often 5%) of the amount certified as due to a contractor on an interim certificate, that is retained by the client. The purpose of retention is to ensure that the contractor properly completes the activities required of them under the contract. Half of the amount retained is released on certification of practical completion and the remainder is released upon certification of making good defects. For more information see: Retention.
In October 2017, the government published the Pye Tait review which sought to assess the costs and benefits of retentions along with a number of alternative mechanisms for ensuring completion of the works.
One of the suggested alternatives was that retention could be held in a trust fund. This can help guard against the risk of the client’s insolvency, as the retention money would not form part of their assets and so could still be received by the contractor. Control over the fund is passed on to an independent agent.
At present, it would appear that the industry is not particularly supportive of using retention trusts. In March 2015, a petition on their use closed having attracted fewer than 2,000 signatures.
 Related articles on Designing Buildings Wiki
Featured articles and news
The quality of Cambridge owes as much to its open spaces as to its architectural uniqueness.
If events occur that cause the completion of the works to be delayed then these may be compensation events.
BSRIA's new Building MOTs Scheme is designed to provide guidance on the next steps after compliance.
At an ICE discussion, the focus was on delivering a Northern Infrastructure Strategy based on opportunity for all.
The Considerate Constructors Scheme officially launch the new Ultra Site status for contractors and supply chains.
The risk of specification errors in the cladding sector is "worryingly high" after Grenfell, according to major distributor.
Here is our outline work plan for a private sector design and build project.
BRE are to publish new guidance aimed at assuring buyers as to the merits of off-site construction methods.
Who are the various different stakeholders in development projects? Find out in our introductory article.
How a BRE office became the centre-piece for major biophilic design research.