Nebraska Retainage Overview

Retainage serves two general purposes: (1) To provide an incentive to the contractor or subcontractor to complete the project; and (2) To give the owner some protection against problems like liens, contractual defaults, delays, and more. In most states, laws exist to regulate how the parties use the retainage concept, mostly protecting some parties against abuse of the tool from others. The following are resources, legal information, and frequently asked questions about Nebraska’s retainage requirements. The Nebraska retainage statutes are reproduced below on this page.

Nebraska Retainage for Private Projects FAQs

Nebraska Retainage FAQs

Does Nebraska limit the amount of retainage that can be withheld from a contractor?

Retainage funds not to exceed 10%.  Rate reduced to 5% after half of the project is completed.  Retainage may not be withheld after work is substantially complete.

How long can a party withhold retainage in Nebraska?

Owners shall pay a contractor within 45 days after substantial completion of the project or a portion of the project. Contractors shall pay subcontractors retention due within 10 days of receiving retainage from the owner.

Does Nebraska require retained funds be deposited in a special account? Can securities be substituted for retainage?

Indiana does not provide a retainage statute for private projects.

How can I make a claim to recover retainage in Nebraska?

Contractor must submit payment request to owner.

Is there a specific notice required to recover retainage in Nebraska?

See above.

Nebraska Retainage for Public Projects FAQ

Nebraska Retainage FAQs

Does Nebraska limit the amount of retainage that can be withheld from a contractor?

No retainage rate or limits imposed by statute.

How long can a party withhold retainage in Nebraska?

Indiana does not provide a retainage statute for public projects.

Does Nebraska require retained funds be deposited in a special account? Can securities be substituted for retainage?

Indiana does not provide a retainage statute for public projects.

How can I make a claim to recover retainage in Nebraska?

Indiana does not provide a retainage statute for public projects.

Is there a specific notice required to recover retainage in Nebraska?

Indiana does not provide a retainage statute for public projects.

Nebraska Retainage Statutes

Getting informed about prompt payment laws is important. An examination of Nebraska’s retainage laws, the rules and regulations related to the amount and timing of allowable retained payments, is important to know your rights and responsibilities as a party on a construction project. Nebraska’s specific laws can be found in: Neb. Rev. Stat. § 45-1204, and are reproduced below.

Retainage Statute on Private Projects

§ 45-1204: Withholdings; Authorized

When work has been performed pursuant to a contract, an owner, a contractor, or a subcontractor may only withhold payment:

(1) For retainage, in an amount not to exceed the amount specified in the applicable contract, which shall not exceed a rate of ten percent. If the scope of work for the contractor or subcontractor from which retainage is withheld is fifty percent complete and if the contractor or subcontractor has performed work in accordance with the provisions in the applicable contract, no more than five percent of any additional progress payment may be withheld as retainage if the contractor or subcontractor provides or has provided satisfactory and reasonable assurances of continued performance and financial responsibility to complete the work;

(2) Of a reasonable amount, to the extent that such withholding is allowed in the contract, for any of the following reasons:

(a) Reasonable evidence showing that the contractual completion date will not be met due to unsatisfactory job progress;

(b) Third-party claims filed or reasonable evidence that such a claim will be filed with respect to work under the contract; or

(c) Failure of the contractor to make timely payments for labor, equipment, subcontractors, or materials; or

(3) After substantial completion, in an amount not to exceed one hundred twenty-five percent of the estimated cost to complete the work remaining on the contract.

Retainage Statute on Public Projects

N/A.

Nebraska does not provide a retainage statute for public projects.