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Can GC withhold retention from a sub if GC's contract with owner does not contain retainage?

CaliforniaRetainage

Private sector work. 6 year project with 3 years already complete. Owner does not withhold retainage from their GC. We are a sub to the GC. The GC recently started holding 10% retainage. Our contract with GC has a clause that says they can withold retainage but they have done so for the first 3 years. Can GC withold retainage from their sub if the owner is not witholding retainage from the GC?

1 reply

Dec 18, 2019
There is no statute on private works in California which prohibits a general contractor from withholding retention from subcontractors if the project owner is not similarly withholding retention from the GC.  On the other hand, it appears that, in your case, the GC chose not to enforce the retention clause in the subcontract for a considerable period of time, which might give you an argument that the GC has waived its right to now enforce the clause.
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