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Where is the authority for an assertion on your website?

In the section titled "California Retainage Public Projects FAQs", the first question answered is: "Does California limit the amount of retainage that can be withheld from a contractor?" The answer provided includes the following: " After 95% of the work is complete, withheld funds may be reduced to at least 125% of the estimated value of the unfinished work." I am curious where this rule is located. Thanks, Colin

1 reply

Mar 12, 2020

For state agencies, if the amount retained is greater than 125 percent of the estimated value of the work to be completed, the state agency must distribute undisputed retention proceeds within 60 days of the completion of the work of improvement. Pub. Cont. Code section 7107(c). If a state agency retains 125 percent or less of the estimated value of the work yet to be completed, the state agency has 90 days in which to release undisputed retentions. Pub. Cont. Code section 7107(g). At any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing by the sureties on both the performance bond and payment bond. Pub. Cont. Code section 10261(b) Disclaimer: NOTE: The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. This posting does not create any attorney-client relationship and is neither intended to constitute an advertisement nor a solicitation.

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