They won't release my retention until the employer releases theirs
Our work finished months ago, and the answer to every request is that the main contractor hasn't had its own retention back yet.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
Being told your retention waits for the employer's own release is one of the commonest reasons given for not paying. It may be put to you as a rule of the trade, written into an amended subcontract, or just repeated in every reply. Meanwhile, the employer's release can depend on things you have no part in: other trades' defects, the main contractor's own final account, or the employer's cash.
Left alone, your money is tied to problems that are not yours, with no date in sight. Whether the condition can hold your money depends on the exact wording of your subcontract. It also depends on the limits the Housing Grants, Construction and Regeneration Act 1996 places on making payment depend on what happens under another contract. That is a question for your solicitor.
The solution
Find what your subcontract actually says triggers each release, check whether that trigger has happened, and take the sum held from the payment paperwork. Then ask in writing for payment in the next cycle, citing the clause and the trigger. That makes your main contractor state its reason against the wording, instead of repeating it as custom.
Retention Claim builds that position and answers the reason given with the documents, while your solicitor advises on what the condition means in law. Retention Loss Prevention flags any release wording tied to the main contract when each new subcontract goes into the register. You then know about it before the release falls due.
Example
Illustrative example. The scenario and figures are invented.
The facts
A glazing subcontractor finished a £520,000 package 14 months ago. Its subcontract holds 3 per cent retention, £15,600, and every request gets the same answer: the employer has not yet released the main contractor's retention.
What happens
- The subcontractor reads the subcontract with its amendments. The first half, £7,800, is triggered by practical completion of the subcontract works, which the main contractor confirmed by email 11 months ago.
- Nothing in the release clause mentions the employer or the main contract. The employer condition appears only in the main contractor's replies.
- The second half is tied to the end of the subcontract's defects period, which has not ended yet, so its date goes in the diary.
- The subcontractor asks for the £7,800 in writing, citing the clause, the completion email and the payment history, for payment in the next cycle.
- The next Payment Notice again shows nil against the release and gives the employer reason. The subcontractor asks its solicitor what that notice and the release wording mean for the £7,800.
- On the solicitor's advice, the subcontractor writes once more, setting out the sum due, the clause and the step it will take if the sum is not paid.
The retention in figures
| Item | Amount |
|---|---|
| Package value | £520,000 |
| Retention held at 3 per cent | £15,600 |
| First half, due on completion of the subcontract works | £7,800 |
| Second half, due at the end of the defects period | £7,800 |
The outcome
The first £7,800 is paid in the next cycle. The second half sits in the diary against the end of the defects period, with its request already written.