Recovering retention—checklist


Published by a ³ÉÈËÓ°Òô Construction expert
Checklists

Recovering retention—checklist


Published by a ³ÉÈËÓ°Òô Construction expert

Checklists
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This Checklist sets out the key issues to consider when dealing with the payment or recovery of retention monies. It assumes that the contract is subject to the HGCRA 1996 and primarily refers to employer–contractor retention monies, although the same issues also apply to contractor–sub-contractor retention monies. See Practice Note: Retention of payment in construction contracts for an explanation of retention, when it is usually paid, and the way retention is dealt with under JCT and NEC contracts.

  1. •

    What does the building contract say?

    At the outset, check the provisions of the building contract surrounding retention. The most common arrangement is that the retention monies are due in two halves: the first 50% is payable after practical completion of the works, and the remainder after completion of any defects notified during the defects period.

    Building contracts expressly state that the retention should be held on trust. Even if they do not make this provision, case law implies this requirement. However, a common amendment is to remove the need for the employer to set the retention monies aside, perhaps to avoid having

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