Oregon and Washington now allow contractors and subcontractors to avoid cash retainage by posting a surety bond with the owner, on both public and private/commercial construction projects. The process is similar in both...more
By Craig K. Williams, David W. Wilhelmsen, and Amanda M. Manke Retainage is a practice, standard in the construction industry, of withholding predetermined portions of payments due to the contractor until the project is...more
Construction contracts for private projects will soon be subject to a new retainage law in Mississippi. On April 19, 2024, Gov. Tate Reeves approved SB 2762 into law, and after July 1, 2024, most construction contracts on...more
On March 7, 2024, the Oregon legislature enacted a significant change to the state's law on retainage requirements for public and private construction projects. The new law introduces options for contractors to receive full...more
On November 17, 2023, Governor Kathy Hochul signed Senate Bill 3539, amending Section 756-a and Section 756-c of the New York General Business Law (more commonly referred to as the Prompt Payment Act) to set the maximum...more
New York has made changes to its Prompt Payment Act (N.Y. Gen. Bus. Law §756) Legislation, which Gov. Kathy Hochul signed into law on November 17, 2023, provides that: • retainage on private construction projects is capped...more
On November 17, 2023, Governor Kathy Hochul signed a bill into law amending Sections 756-a and 756-c of the New York State Prompt Payment Act (N.Y. Gen. Bus. Law §756 (McKinney 2009)) governing restrictions on retainage and...more
On November 17, 2023, Governor Hochul signed a bill placing significant restrictions on the amount of retainage that can be withheld from contractors and subcontractors, and permitting the earlier submission of final billing...more
A newly-enacted amendment to the New York General Business Law is designed to reduce delays in final payments to contractors, limit the amount of the contract sum (“retainage”) that can be withheld by and revises the...more
On Friday, November 17, 2023, Governor Hochul signed into law a bill which limits the retainage held on construction contracts for private improvements to 5% of the contract price from inception of the project – this applies...more
No matter your tier in the construction contracting chain, understanding the nuanced rules and procedures about retainage, back charges, and other payment withholdings is critical to managing cash flow and protecting your...more
On May 9, 2023, Washington Governor Jay Inslee signed into law Senate Bill (SB) 5528, which limits the percentage of retainage withheld from contractors on private construction projects in Washington....more
New private project retention cap matches that for public construction projects and takes effect July 23 - This year, the Washington State Legislature approved a cap on retainage for private projects. The stated purpose of...more
Depending on the state, retainage often provides an owner a security interest in unpaid funds to help cover completion costs or other damages that may later occur by withholding a certain portion (typically 5-10%) of contract...more
In my last post, I discussed ways subcontractors can protect themselves from waiving their right to lien before the owner pays. However, what if an owner pays its general contractor (GC), but the funds never make it to the...more
Here’s the Scenario: Try explaining the concept of “retainage” to a businessperson unfamiliar with the construction industry at your next holiday party. Here’s the typical response as she spits out her eggnog: “Wait a minute:...more
Earlier this month, our firm was well-represented at the 35th Annual Construction Law Conference in San Antonio, Texas. As always, the conference presented great opportunities to visit with colleagues and other construction...more
Legislation about retainage has become common place as many states have adopted different limitations, requirements, and schemes. A recent case in Tennessee is a good reminder that you must pay attention to all of the...more
On June 30, the Supreme Court of Tennessee issued an opinion interpreting the retainage provisions in Tennessee’s Prompt Pay Act (the Act). The opinion has significant implications for construction projects across Tennessee....more
As everyone in the construction industry knows, timely payment is essential. However, the payment process can be complicated, with unexpected issues throwing plans off course. In their second webinar of 2021, Cohen...more
After a number of controversial bills proposed from various industry groups over the last few years, the Tennessee construction community came together in 2020 to push through legislation intended to protect members of the...more
The Tennessee legislature recently passed the Construction Industry Payment Protection Act (“CIPPA”), SB2681/HB2706, which offers significant changes to the Tennessee construction industry. Not only does the act amend...more
The Tennessee Construction Industry Payment Protection Act was signed into law on June 22. The Act addresses or reallocates certain risks associated with non-payment on construction projects under Tennessee’s Prompt Pay Act...more
There have been debates for years about the pros and cons of owners withholding retainage (usually 5% or 10%, depending on each state’s retainage laws or local “industry standard”) from prime contractors. Typically, the...more
This Construction Law Alert highlights some of the significant Tennessee state and federal decisions affecting the construction industry from the past year. Holdback Payments Are Not Retainage - Tennessee’s Prompt Pay...more