Lien Foreclosure Florida For Retainage
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FAQ
When retention is subtracted from the invoice, the amount held is recorded as retention receivable. Once the project is complete and you're billing your customer for the retention that was held throughout the project, the amount then moves from retention receivable to accounts receivable.
On public projects, the maximum amount of retainage that can be withheld is 10% from each progress payment. Upon 50% of completion, the public entity must reduce the amount of retainage withheld to 5% of the remaining progress payments.
SECTION 078Public construction retainage. (1) With regard to any contract for construction services, a public entity may withhold from each progress payment made to the contractor an amount not exceeding 5 percent of the payment as retainage.
Retainage payable is generally considered a liability and should be recorded on the balance sheet under current liabilities.
UPDATE: New Florida retainage requirements for public projects went into effect on October 1, 2020. Here's a snapshot of the changes: Retainage limit is now 5% for the lifetime of the project. Reduction in retainage percentage no longer required at 50% completion.