Do we need to request a subcontractor invoice for retainage at the end of a job or does the GC need to pay right after the job without the subs requesting retainage?
1 reply
Jun 16, 2020
Typically, subcontractors will invoice retainage from the GC. Then, the GC will either pay that retainage or will wait until their retainage gets released so they have money to pay their sub's retainage.
However, even if the sub hasn't billed retainage, it's their money. The GC should plan on releasing those funds once they get paid their own retainage. And, requesting an invoice from the subcontractor is a good way to get that ball rolling.
Quite a few construction payment disputes arise out of retainage. So, general contractors should set retainage expectations from the start and include specific retainage provisions in their contracts - including how the sub will request and receive their final retainage payment. For projects where the contract is silent, it's a good idea to reach out to the sub to discuss retainage and agree on a way to make sure the sub gets paid what they're owed.
For more discussion on retainage: The Ultimate Guide to Retainage in the Construction Industry.