Kansas Retainage Guide and FAQs

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Kansas Retainage FAQs

Kansas Retainage Overview

Kansas Retainage Requirements


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Retainage 10% Icon
10% Retainage Limit

Retainage must not exceed 10%


Payment Period 30 Days Icon
30 Day Pay Period

An owner must release retainage on any undisputed payment within 30 days after substantial completion of the project. Original contractors must release subcontractors' retainage within 7 days of receiving retainage from the owner.


YES
PROCESS
There is a Process to Recover

Written notice and suspension of performance until payment is allowed.


Escrow Icon
Held In Escrow

In Kansas, contractors and owners need to hold retainage funds in a separate escrow account.

Retainage 5% Icon
5 Percent

Retainage is generally limited to 5% or less, unless the owner or contractor determines a higher rate (maximum 10%) is required to ensure performance.


Payment Period 30 Days Icon
30 Day Pay Period

Retainage must be released within 30 days after substantial completion, except for the portion attributable to punch list work. Once work is completed, all retainage funds must be released within 45 days of completion.


NO
PROCESS
There's No Process to Recover

Not Specified

Retainage serves two general purposes: (1) To provide an incentive to the contractor or subcontractor to complete the project; and (2) To give the owner some protection against problems like liens, contractual defaults, delays, and more.  In most states, laws exist to regulate how the parties use the retainage concept, mostly protecting some parties against abuse of the tool from others. The following are resources, legal information, and frequently asked questions about Kansas’ retainage requirements. The Kansas retainage statutes are reproduced below on this page.

Kansas Retainage Frequently Asked Questions

Kansas Retainage Private Projects FAQs

Does Kansas limit the amount of retainage that can be withheld from a contractor?

Retainage is limited to no more than 10% of the estimated amount of work. The percentage of retainage withheld by an original contractor from a subcontractor may not be greater than the percentage of retainage withheld by the property owner. Any percent in excess is subject to interest, (paid by the contractor to the subcontractor) at the rate of 1% per month. Also, applies to subcontractor-subcontractor contracts.

How long can a party withhold retainage in Kansas?

An owner must release retainage on any undisputed payment within 30 days after substantial completion of the project. However, if any contractor or subcontractor is still performing work on the project, an owner may withhold that portion of retainage until 30 days after such work is completed. Original contractors must pay the retained amount to subcontractors within 7 days of original contractor’s receipt of payment from the owner if no dispute arises (failure to do so results in 18% interest).

Does Kansas require retained funds be deposited in a special account? Can securities be substituted for retainage?

Statute does not specify where to deposit retainage funds. Prior to commencement of work, a general contractor or subcontractor may request an alternate security in lieu of retainage.

How can I make a claim to recover retainage in Kansas?

If any undisputed payment is not made within 7 business days of due date, the contractor and any subcontractor, upon 7 additional business days’ written notice to owner and, in the case of a subcontractor, written notice to the contractor, is entitled, without prejudice, to suspend further performance until payment, including interest, is made.

Is there a specific notice required to recover retainage in Kansas?

See above.

Kansas Retainage Public Projects FAQs

Does Kansas limit the amount of retainage that can be withheld from a contractor?

Retainage is generally limited to no more than 5%, unless the owner or contractor determines a higher rate is required to ensure performance. The higher rate may not exceed 10%. Up to 150% of the value of incomplete work may be withheld. Retainage for road/bridge projects, limited to no more than 10%.

How long can a party withhold retainage in Kansas?

Retainage must be released within 30 days after substantial completion excepting the portion attributable to punch list work. Once work is completed, all retainage funds must be released within 45 days of completion. Failure to do so results in 18%/year interest due. If the release of retainage would not result in additional cost or risk to owner/original contractor, subcontractors may be entitled to early release of retainage.

Does Kansas require retained funds be deposited in a special account? Can securities be substituted for retainage?

A contractor or subcontractor, prior to the commencement of work, may request a substitution of security in place of retainage. Whomever would withhold the retainage has the right to determine what type of security will replace the retainage.

How can I make a claim to recover retainage in Kansas?

This is not specified in the Kansas retainage statute for public projects.

Is there a specific notice required to recover retainage in Kansas?

This is not specified in the Kansas retainage statute for public projects.

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Recovering r etainage from prior years

I live in Kansas. I’ve done work for a person who took 10% of each job as a retainer for repairs and such. Ive requested...

Kansas Retainage Statute FAQs

Getting informed about prompt payment laws is important. An examination of Kansas’ retainage laws, the rules and regulations related to the amount and timing of allowable retained payments, is important to know your rights and responsibilities as a party on a construction project. Kansas’ specific laws can be found in: K.S.A. 16-1904(a), K.S.A. 16-1904(d) and (e), K.S.A. 16-1904(h) – (j), and K.S.A. 68-411, and are reproduced below.

Retainage Statute on Private Projects

N/A

N/A

Retainage Statute on Public Projects

16-1904(a):

Retainage shall not exceed 5% of the value of the contract or subcontract unless the owner or contractor determines that a higher rate of retainage is required to ensure performance of the contract. Retainage, however, shall not exceed 10% of the value of the contract or subcontract.

16-1904(d):

A contractor may withhold not more than 150% of the value of incomplete work, provided that the incomplete work is due to the fault of a subcontractor. Any amounts retained for incomplete work shall be paid within 45 days after completion of the work as part of the regular payment cycle.

16-1904(e):

A subcontractor may withhold not more than 150% of the value of incomplete work that is the responsibility of another subcontractor, provided that the incomplete work is due to the fault of such other subcontractor. Any amounts retained for incomplete work shall be paid within 45 days after completion of the work as a part of the regular payment cycle.

16-1904(h):

An owner, contractor or subcontractor must release all remaining retainage on any undisputed payment due on a construction project within 30 days after substantial completion of the project as part of the regular payment cycle; however, if any contractor or subcontractor is still performing work on the project, an owner may withhold that portion of the retainage attributable to such work until 30 days after such work is completed.

16-1904(i):

If an owner, contractor or subcontractor fails to pay retainage, if any, pursuant to the terms of a contract for public construction or as required by this act, the owner, contractor or subcontractor shall pay interest to the contractor or subcontractor to whom payment was due, beginning on the first business day after the payment was due, at a rate of 18% per annum.

16-1904(j):

Nothing in this section shall prevent early release of retainage if it is determined by the owner, the contractor and the project architect or engineer, that a subcontractor has completed performance satisfactorily and that the subcontractor can be released prior to substantial completion of the entire project without risk or additional cost to the owner or contractor. Once so determined, the contractor shall request such adjustment in retainage, if any, from the owner as necessary to enable the contractor to pay the subcontractor in full, and the owner shall, as part of the next contractual payment cycle, release the subcontractor’s retainage to the contractor, who shall, as part of the next contractual payment cycle, release such retainage as is due to the subcontractor.

68-411:

The secretary of transportation shall make partial payment to a contractor performing any road or bridge work under contract with it, as the work may progress, said partial payment not to be less than ninety percent (90%) of the contract price of the material delivered and work done and accepted. The secretary shall provide by regulation, to be made a part of all specifications, for the withholding of not more than ten percent (10%) of the full contract price of any such work until the work is satisfactorily completed and approved by the secretary and the provisions of the contract and bond therefor have been fully satisfied.

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