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Can the prime contractor withhold funds if retainage is not included in the contract.

ColoradoBack Charges Retainage

Is retainage allowed in Colorado if it is not included in the contract? A prime contractor is withholding 10% retainage, even though it is not part of the contract. He is then holding funds for damages to the landscape by equipment, and final funds for the equipment rental.

1 reply

Jun 29, 2020

If a subcontractor were to perform defective work or by its acts or omissions, cause the GC to incur costs, then the GC would arguably be entitled to withhold from the subcontractor's payment an amount sufficient to ensure the correction of the defective work or other items. However, absent a contract provision, the GC is not entitled to withhold 10% retainage. Retainage must be specified by contract.

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