Virginia Retainage Requirements
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- Public Jobs
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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 Virginia, contractors and owners do not need to hold retainage funds in a separate escrow account.
5 Percent
Retainage cannot exceed 5%.
Pay Period
Not specified in statute.
There's No Process to Recover
Not specified
Not Held In Escrow
In Virginia, contractors and owners do not need to hold retainage funds in a separate escrow account. However, some local government contracts are required to provide the option.
Retainage, also called “retention,” is an amount of money “held back” from a contractor or subcontractor during the course of a construction project. In general, retainage serves two main 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 answers to frequently asked questions about Virginia’s retainage requirements.
Virginia’s retainage limits and deadlines
Virginia’s retainage statutes only apply to public construction contracts. On such public works projects, the amount of retainage that can be withheld is capped at 5% of each progress payment. There are no specific timelines for the release under the retainage statutes. However, payments in general on public projects in Virginia are subject to the state prompt payment laws.
On all private projects, the amount of retainage withheld and the timing of its release will be governed by the terms of the contract.
