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Waiting 13 months for Retainage

I worked as a sub sub contractor for company that works directly with Home Depot - we did tile for homeowners that contracted Home Depot and this company subcontracted my company and with held approx 5-10% each job - we stopped working for them over 12 months ago and retainage as per our agreement would be released as per the month of April its May and no Ck but there now saying because of Covid there not working I’m waiting for retainage for 13 months now. Anything we can leaf ally do or any definite law that backs me up with an email I can send in a professional manner that would move this process along. Thanks

1 reply

May 8, 2020

There are a few different ways to force a customer or project owner to release retainage. Though, when a significant amount of time has passed, some options will be off the table. We'll explore some options below. But, keep in mind that consulting with a New York construction attorney could help to identify how best to move forward if it looks like litigation will become necessary. Plus, depending on the size of the dispute, small claims court could be an option for recovering payment, too. Or, sending the debt to collections might result in partial recovery.

Payment demand letter

Threatening to take legal action could lead to payment. By sending a payment demand letter, the claimant lets their customer know they're serious about getting paid. Demand letters will usually include specific legal threats - like breach of contract or a claim under New York's retainage laws.

Notice of Intent to Lien

Threatening to file a mechanics lien could lead to payment, too. By sending a Notice of Intent to Lien to the customer, other businesses working on the project, and to the property owner - a claimant lets everyone on the job know that there's a payment issue that must be resolved. And, by bringing others' attention to the matter, that can put additional pressure on the customer to pay what's owed. Keep the New York mechanics lien deadline in mind, though. If lien rights are clearly no longer on the table, then threatening a mechanics lien claim might not be the best idea.

New York's retainage laws

As for those retainage laws: In New York, owners must release retainage to their contractors within 30 days after the final approval of the work. Upon receipt, contractors must release retainage to their sub - and subcontractors owe the same duty to their sub-subcontractors. If retainage gets held up at any point in this payment chain, the unpaid party will be entitled to interest of 1% per month. So, the threat of a retainage claim should be taken seriously. And, if it isn't - actually proceeding with a legal claim could do the trick and may result in damages, interest, costs, attorney fees, etc. You can learn more about the New York retainage laws here: New York Retainage Guide and FAQs.

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