How do I claim retention in construction?

As soon as possible after your part of the contract has been completed, submit a ‘claim for practical completion’ for half the retention sum (typically 2.5 per cent of your contract value). Note in your calendar the end of the DLP and when it is over promptly submit a ‘final claim’ for the balance of your retention.

Who holds the retention money?

Retentions can be held at different levels, as between principal and head contractor, and between head contractor and subcontractors, for example. Each retention has to be separately held by the responsible payer at each level, even if they all ultimately relate to one construction contract.

When do you claim retention money after construction?

This also safeguards the principal contractor from paying extra for delays and defects. Time frames apply on the exact time when a subcontractor could claim this retained money. Usually, this money can be claimed after the actual building’s completion and/or after the defects liability period.

How are retentions used in the construction industry?

What is a Retention? Retentions are used in the Building and Construction industry to secure performance of a project. Retention is money held back from contract fees to protect against defects which could develop and the contractor fails to fix. This amount is usually 5% of the full contract fee though this can be 3% for larger work.

How much money is held back for retention?

Retention is money held back from contract fees to protect against defects which could develop and the contractor fails to fix. This amount is usually 5% of the full contract fee though this can be 3% for larger work.

How does the retention fund work in construction?

A contractor is generally paid in instalments over the course of any project/contract, with a percentage of those payments withheld as retention. Thus the retention fund represents an accumulated fund built up over the entire duration of the contract.

How much retention money can I claim on a construction contract?

A usual construction contract will have 5% of the contract’s value as the amount of retention money. It can also be a 10% deduction for the payment you have recieved each progress payment.

When to withhold retention from a building company?

The total cost of the work to the building company will be $100,000 exc GST. A retention of 5% being $5,000 is to be withheld for a period of 6 months after completion of the building. Setup new Account Recommend to create a re-contact diary entry to follow up the retention value after the expiry period to withhold the retention.