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Home>Levelset Community>Legal Help>On a private project retention is held up to 45 days from when that specific part of the work is complete or 45 days after the project is complete in its entirety? We are often on jobs for over 2 years and sometimes they take another year for final completion...Thank you

On a private project retention is held up to 45 days from when that specific part of the work is complete or 45 days after the project is complete in its entirety? We are often on jobs for over 2 years and sometimes they take another year for final completion...Thank you

CaliforniaRetainage

Our varying scope takes many years from inception to completion, shop drawings, fabrications, installation and then final

1 reply

Jun 10, 2019
That's a great question, and navigating retainage requirements can be tough - particularly on long-running, multi-phased projects. First, let's look at the retainage rules for California. Then, we can discuss details a bit further.

In California, a project owner can withhold retainage from their prime contractor for up to 45 days after the overall completion of the project. Once that prime contractor has been paid retainage (in whole or in part), they must release their subs' portion of those payments within 10 days. Note, though, that if there's a specific issue with a sub's work, their customer can withhold up to 150% of the value of that specific issue - so some retainage might be withheld a little bit longer.

Of course, this is only the deadline by which payment must be made. So, contractors and subs are free to contract for shorter retention periods. Or, alternatively, they might contract for retainage to be released upon the completion of specific phases of the project. Where a project will span a long period of time, owners and contractors might be more amenable to altering retainage periods to be a little fairer and representative of the project at hand.

For more information on retainage, these resources will help:
(1) California's Retainage Overview, FAQs, and Statutes
(2) Retainage in Construction | Guide, FAQs, Rules, & Help
(3) The Ultimate Guide to Retainage in the Construction Industry.
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