I have a contract with a city for 135,000 in which they paid all of it but the retention which is about 6,500 remaining.I have not paid me and it’s been around six months..My question is can I take them to small claims court for the balance?
1 reply
May 14, 2020
Retainage must be released within 60 days of completion of the work of improvement on California public projects. Further, after 95% of work is complete, retainage amounts must be reduced.
If there's a good faith dispute about some of the work, then the public owner is entitled to withhold 150% of the amount that's in dispute until the specific issue is resolved. However, the amounts being withheld must directly relate to the issue at hand. And, the public owner can't opt to withhold all retainage when that amount exceeds 150% of what's at issue.
If the public agency has refused to release retainage without a solid basis for doing so, then sending a payment demand letter threatening to pursue legal claims like breach of contract or claims under California's retainage laws could be effective to shake the retainage payment loose. Additionally, consulting with a California construction attorney will help to evaluate your case and decide how to move forward. Finally, note that retainage disputes must typically be taken to arbitration unless the contract indicates otherwise.