Contingency Fee For Construction In Hillsborough
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Retainage is the withholding of a portion of the final payment for a defined period to assure a contractor or subcontractor has finished a construction project completely and correctly.
Typically, retention in a construction contract is set at between three to five per cent of the overall project value. The contractor will still receive instalment or stage payments, but the percentage is deducted from the interim payments.
Retention is withheld 5-10 percent from progress claims to ensure contract completion. Released in two stages: half at practical completion, the rest after the defect liability period. Protects project owners by ensuring quality work and covering defect repairs.
A Simple Example of Fixed-rate Retainage To calculate your expected holdback, simply multiply the scheduled payment amount by the retainage rate. In this case, a $30,000 payment x 10% retainage would equal $3,000 in holdback for each payment.
Retainage usually depends on substantial completion Most contracts base the deadline for retainage payments on the date of a project's substantial completion.
