Louisiana Retainage Requirements
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No Retainage Limits
Not Regulated by State Law
Not Regulated by State Law
There is a Process to Recover
Yes. File statement of claim or privilege with recorder of mortgages.
Held In Escrow
Yes, if over $50,000
Retainage cannot exceed 10% for projects (excluding Dept. of Transportation) that are less than $500,000. For projects over $500,000, retainage is limited to no more than 5%.
45 Day Pay Period
Retainage may be withheld up to 45 days after formal completion and acceptance of the work.<br />
There's No Process to Recover
Like most states, Louisiana has laws governing retainage on construction contracts. Retainage generally serves two purposes:
- To provide an incentive to the contractor or subcontractor to complete the project
- 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 Louisiana’s retainage requirements. The Louisiana retainage statutes are reproduced below on this page.
- Learn more in The Ultimate Guide to Retainage in Construction.
Louisiana Retainage Rules
Louisiana has multiple statutes that govern retainage on construction projects, both public and private.
Louisiana law doesn’t limit the retained percentage or retainage terms on private construction projects. However, when the contract exceeds $50,000, retained funds must be placed in an interest-bearing escrow account. Certain project types are exempt from this requirement, including single or double family residences and some industrial facilities.
Retainage amounts and payment terms will be governed by the construction agreement between the two parties.
Louisiana caps retainage on public projects, depending on the value of the project:
- Under $500,000: Retainage is limited to 10%
- Over $500,000: Retainage is limited to 5%
On contracts exceeding $50,000, retained amounts must be placed in an interest-bearing escrow account, with exceptions for certain project types. According to Louisiana’s prompt payment statutes, final payment (including retainage) is due within 45 days after the public agency receives a “clear lien certificate.”
On Department of Transportation (DOT) projects, retainage cannot be withheld if the contractor furnishes a retainage bond equal to 10% of the contract amount for projects less than $500,000 or 5% of a contract exceeding $500,000.