Can they hold my retention until the employer releases theirs?
Only if your subcontract says so in terms the law allows, so check the release wording first.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
Many subcontracts tie each release to your own works, such as practical completion of the subcontract works, and never mention the employer. If yours is one of them, the employer's release is not a condition of your subcontract at all. Some amended subcontracts do link release to the main contractor being paid or certified under its own contract. The Housing Grants, Construction and Regeneration Act 1996 limits how far that can work. Section 113 makes a term ineffective if it makes your payment depend on the main contractor being paid by someone else, unless that someone is insolvent. Section 110 also limits making your payment depend on obligations under another contract being carried out. Whether a particular clause is caught depends on its exact wording, so that is a question for your solicitor. Meanwhile, keep the release in the normal payment cycle. Ask for it in your application with the trigger document attached, and check the Payment Notice or Pay Less Notice that answers it.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontract releases half of a £12,000 retention on practical completion of the subcontract works. The main contractor confirmed that by email in March. Its April reply says nothing can be released until the employer releases the main contract retention.
What happens
- The subcontractor reads the release clause. It does not mention the employer or the main contract.
- The request in the May application cites the clause and the March email, and asks for £6,000.
- The subcontractor checks the May Payment Notice for the £6,000, and any Pay Less Notice for how the lower figure was worked out.
The outcome
The employer reason is answered with the subcontract's own wording. The release now sits in the payment cycle, where its notices can be tested.
Our Retention Claim answers that reason with the documents and requests the release in your name.