Oklahoma Retainage Guide and FAQs

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Oklahoma Retainage FAQs

Oklahoma Retainage Overview

Oklahoma Retainage Requirements


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Retainage Unregulated Icon
Retainage Limit

Not Regulated by State Law


Payment Period Not Regulated Icon
Pay Period

Not Regulated by State Law


NO
PROCESS
There's No Process to Recover

Not specified


No Escrow Icon
Not Held In Escrow

In Oklahoma, contractors and owners do not need to hold retainage funds in a separate escrow account.

Retainage 5% Icon
5 Percent

Retainage cannot exceed 5%. Retainage for railroad construction contracts, for the Department of Transportation, and the Turnpike Authority is prohibited.


21
DAYS
21 Day Pay Period

Retainage must be released within 21 days after a certificate of substantial completion is issued, minus 150% of the estimated costs to correct any incomplete or defective work. Upon receipt of retainage, contractor must release retainage to subcontractors within 10 days. All other parties have 7 days to release retainage amounts down the chain.


YES
PROCESS
There is a Process to Recover

Yes, certificate of substantial completion along with "adequate" performance and approval of surety required.

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 Oklahoma’s retainage requirements. The Oklahoma retainage statutes are reproduced below on this page.

Oklahoma Retainage Frequently Asked Questions

Oklahoma Retainage Private Projects FAQs

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

This is not specified for private projects in the Oklahoma retainage statue.

How long can a party withhold retainage in Oklahoma?

This is not specified for private projects in the Oklahoma retainage statue.

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

This is not specified for private projects in the Oklahoma retainage statue.

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

This is not specified for private projects in the Oklahoma retainage statue.

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

This is not specified for private projects in the Oklahoma retainage statue.

Oklahoma Retainage Public Projects FAQs

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

Progress payments retainage rate is limited to no more than 5% of each partial payment. Retainage for railroad construction contracts is prohibited.

How long can a party withhold retainage in Oklahoma?

Retainage shall be released in full at the completion of the contract. No later than 21 days after a certificate of substantial completion for the project, upon adequate performance of the prime contractor, and with approval of a surety shall the owner release retainage to the prime contractor less an amount no greater than 150% of the estimated costs to correct any incomplete or defective work. The prime contractor then has 10 days to release retainage to subcontractors that are due. All other entities have 7 days to release.

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

Securities may be substituted for retainage.

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

Must submit a certificate of substantial completion, along with adequate performance of the prime contractor, and approval by surety/owner.

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

See above.

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Oklahoma Retainage
Recent Questions & Answers

what is the law regarding general contractors withholding 10 % retainage?

i am a subcontractor who is constantly faced with issues getting retainage released. I thought after job reached a certain percentage of completion that retainage...

Oklahoma Retainage Statute FAQs

Getting informed about prompt payment laws is important. An examination of Oklahoma’s 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. Oklahoma’s specific laws can be found in: Okla. Stat. tit. 61, § 226, § 113.2; and are reproduced below.

Retainage Statute on Private Projects

N/A

Oklahoma does not provide a specific retainage statute for private projects.

Retainage Statute on Public Projects

Tit. 61 § 226: Retainage of Portion of Payment Due; Release

(A) A construction contract may include a provision for the retainage of a portion of payment due. Such retainage is not to exceed five percent (5%) of the amount of the payment due.

(B) A subcontract may include a provision for the retainage of a portion of payment due. Such retainage is not to exceed five percent (5%) of the amount of the payment due.

(C) No later than twenty-one (21) calendar days after a certificate of substantial completion is issued for the project or separate usable phase of the project and upon adequate performance of the prime contractor and with approval of any applicable surety, retainage shall be released by the owner to the prime contractor less an amount no greater than one hundred fifty percent (150%) of the estimated costs to correct any incomplete or defective work as identified, itemized, and attached to the certificate of substantial completion. All remaining funds shall be released as each deficiency is satisfactorily completed. The prime contractor shall release within ten (10) calendar days of receipt, the share of those funds that have been withheld from other entities. All other entities shall release within seven (7) calendar days of receipt, the share of those funds that have been withheld from other entities.

Tit. 61 § 113.2: Withdrawal of Retainage; Deposit of Securities

The contractor may, from time to time, withdraw any part, or the whole, of the amount which has been retained from partial payments to the contractor pursuant to the terms of contract, upon depositing with or delivery to the awarding public agency, or other appropriate public official designated in the contract document: (1) United States Treasury bonds, United States Treasury notes, United States Treasury bills, or (2) general obligation bonds of the State of Oklahoma, or (3) certificates of deposit from a state or national bank having its principal office in the State of Oklahoma. No retained amount shall be withdrawn which would represent an amount in excess of the market value of the securities at the time of deposit or of the par value of such securities, whichever is lower.

At the time of deposit of any securities the same shall be endorsed, if necessary, and shall be accompanied by a conditional assignment to the awarding public agency, or to the other public body designated as “owner” in the contract documents, which will empower the awarding public agency, or other appropriate public official designated to have custody of same, to negotiate same at any time to the extent necessary to cause the contract to be fulfilled. The securities which remain on deposit at the time of completion of any contract and observance by the parties to the contract of any other statutory obligations relative thereto shall be returned to the contractor.

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