On a Public Project with 5% Retainage when/if the GC gets a reduction to 2 1/2% is the GC required to pass that reduction along to it's Subcontractors? What is the time frame?
1 reply
Apr 23, 2020
On Tennessee public projects, contractors must release retainage to their subs within 10 days after receiving that retainage according to Tennessee Code § 66-34-103(b). And, nothing in the retainage statute appears to require that retainage be fully released before payments to subs and suppliers are required.
So, if a Tennessee contractor has been paid retainage, they should release that to subs and suppliers, proportionally, within 10 days. Otherwise, the contractor will be subject to penalties and potentially interest.
Finally, keep in mind that there are a number of tools available to help force a customer to pay retainage. So, if talking things out isn't effective, then using tools like demand letters, Notices of Intent, and even actually making a bond claim could be effective to force payment. And, proceeding with legal claims or sending a debt to collections could be additional options, too.