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What should I list on my TX multi-preliminary notice if I don't know the retainage amount from the start?

TexasPreliminary NoticeRetainage

I have started sending preliminary notices at the start of all my jobs in TX. Many of our jobs are service jobs, and a lot of these don't have retainage. If they do have retainage, I may not find out about it until much later, but I want to send the preliminary notice at the beginning. Is there any risk to listing a blanket "10%" retainage on each job, even if the amount might end up differing (e.g., be 0% or 5%) later on? We have a very high job volume and it's not feasible for me to go in and track/update the retainage each time.

1 reply

Jun 9, 2020
Texas' Notice of Contractual Retainage only calls for a general statement of retainage on the job. So, if you don't know the exact amount or percentage of retainage that will be withheld on the job, that should be alright. Instead, using something like a typical range, an estimate, or even a very plain generic statement that retainage is being withheld on the job may be enough. Granted, if possible, being a bit more specific is helpful. Further, keep in mind that Texas' Notice of Contactual Retainage can really be sent at any time during your work on the site. It must be sent not later than the earlier of these two dates: (1) the 30th day after the date the agreement for work is completed, terminated, or abandoned; or (2) the 30th day after the prime contract is terminated or abandoned. So, if you send a notice early on, but need to correct it later, that should be possible (as long as it's sent before your work is finished). But, again - being conservative and sending this notice early is generally wise. Lastly, note that Texas retainage amounts can also be preserved via monthly notices. So, if you're hired by someone other than the owner and all retainage amounts are included in the monthly notices you send, that should be adequate to protect retainage amounts, too. For more information on Texas notices: Texas Preliminary Notice Guide and FAQs. For more information on retainage in Texas: Texas Retainage Guide and FAQs.
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