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 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
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
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
One of the bills of interest to construction professions in the 2021-2022 session of the Georgia General Assembly, Senate Bill 438, recently passed and alters how much retainage is withheld on public construction projects. ...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
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
The subcontractor did everything right: it did the work, but did not get paid, and thereafter properly perfected a lien. Now, the subcontractor has an opportunity to settle with the general contractor or even its subsequent...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
The Illinois legislature recently passed a law modifying the Contractor Prompt Payment Act, impacting retainage on all private projects (except residential projects involving twelve units or less). The law sets the ceiling...more
The Illinois Contractor Prompt Payment Act, 815 ILCS 603/1, et seq. (the “Act”) was first enacted in 2007 and designed to safeguard contractors and subcontractors on private projects by providing a mechanism to expedite...more
Effective August 20, 2019, Illinois law provides that a maximum of 10 percent retainage may be withheld from payments under private construction contracts and, after the contract is one-half complete, retainage must be...more
In Vic Davis Construction, Inc. v. Lauren Engineers & Constructors, Inc., the Tennessee Court of Appeals approved a contractor’s use of closeout costs to “holdback” 5% of the contract price without complying with the...more
The Illinois legislature recently passed a bill that may impact retainage on your projects. The bill—if passed into law—sets the ceiling for retainage at 10%, and requires that retainage be reduced to 5% once the project is...more
Illinois is the most recent in a number of states to consider legislation that modifies the practice of withholding payments from contractors and subcontractors as retainage. ...more
Minnesota has modified its prompt payment and retainage statute (Minn. Stat. 337.10). These revisions mean that many owners, contractors and subcontractors will have to revise the payment provisions of their construction...more
Property owners seeking to insulate themselves from some of the inherent risks associated with construction projects often turn to retainage provisions to reallocate very specific risks—the risks of delay, defective...more