Retention: definition and example
Money withheld under the agreed payment terms as security, with release governed by your subcontract’s events and conditions.
By Jack Butler-Kettle · Updated
Guidance for England and Wales. Check the contract, amendments and facts that apply to your job.
What it means in practice
Read this alongside JCT explanation of retention and bonds in lieu.
Retention holds back part of a payment as contractual security. The percentage, cap and release events need to be checked in the subcontract. Release may depend on certification or other conditions; completion of your own work and completion of the whole project can be different events.
Track each retained amount and its release basis. Retention recovery can help establish the balance and evidence supporting a release request.
Worked example
The facts
An illustrative subcontract retains 5% of £40,000, leaving £2,000 held back.
What happens
Its assumed terms release half at a specified completion event.
The subcontractor checks that event and requests the relevant £1,000 with supporting evidence.
What this shows
The figures explain the mechanism; actual percentages and release conditions must come from the relevant agreement.
Sources
- What’s Wrong with Retention? (JCT explanation of the 2016 forms). The Joint Contracts Tribunal.