South Dakota Retainage Requirements
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Retainage Limit
Not Regulated by State Law
Pay Period
Not Regulated by State Law
There's No Process to Recover
Not specified
Not Held In Escrow
In South Dakota, contractors and owners do not need to hold retainage funds in a separate escrow account.
12 Percent
Contracts less than $50,000 cannot have retainage less than 12%. For projects between $50,000 and $250,000, retainage shall not be less than 12% on the first $50,000 and 5% on the next $200,000. For projects over $250,000, retainage shall not be less than 12% on the first $50,000, 5% on the next $200,000, and 2.5% on the remaining contract amount.
60 Day Pay Period
Payment is due 60 days after completion of the work.
There is a Process to Recover
Acceptance required by superintendent or architect.
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 South Dakota’s retainage requirements. The South Dakota retainage statutes are reproduced below on this page.
