We are 99.9% completed on a project everything with the exception of the landscaping. The retention was reduced to 5% a few months ago but they are refusing to reduce to at least 2 1/2% until fully completed. The amount of work is equal to about 10,000 and they are holding 180,000 in retention. Some of the subcontractors have been completed for over 10 months. What does the law state about this?
You wish to know if the law permits the Retainage in your project to fall below 5% due to how close to completion it is. The Short Answer is "No." A Retainage need not legally be less than 5%. The law provides as follows:
815 ILCS 603/20 Retainage. No construction contract may permit the withholding of retainage from any payment in excess of the amounts permitted in this Section. A construction contract may provide for the withholding of retainage of up to 10% of any payment made prior to the completion of 50% of the contract. When a contract is 50% complete, retainage withheld shall be reduced so that no more than 5% is held. After the contract is 50% complete, no more than 5% of the amount of any subsequent payments made under the contract may be held as retainage
Of course there are steps you can take, including the use of the Illinois Prompt Payment Act. I recommend you sit down with a competent Attorney to discuss your options. Best of luck.