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What Is Retention in
Construction?
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By: Tessa Holmes
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Levels of Retention construction? The Best and Worst States

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There are two levels of retention. The first level of best-and-
PARTNER CONTENT
retention deals with the owner of a building under worst-
states- How to Take Your Next
construction. That building's owner may establish a for- Vacation for Free
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Retention provides owners with knowledge that the trumps-
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entirety. A retention plan often calls for the the-13-
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withholding of 5 percent to 10 percent of payment rule-
until the work is finished as promised. Also, retention antiquated)
ensures that items on the punch list, or the list of
items that will vary after completion of a project, is
completed in its entirety as well.

Examples of Retention

If an owner was building a home with five bedrooms

she might agree to pay an electrician $20,000, or
$4,000 per room, to service all five. Under a retention
plan, the electrician would not receive 20 percent of
what was completed until the entire job was
completed. If the electrician quits after finishing four
out of five bedrooms that means he or she would
receive only 80 percent of the promised money, or
$16,000.

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What Is Retention in Construction? | Sapling.com | Sapling.com 4/26/17, 04:01

Limitations of Retention

Retention is generally a good idea to include in a

construction contract, but it is not applicable to all
situations. Construction workers that handle stored
materials usually cannot be forced to follow a
retention plan. This includes those who provide and
deliver materials needed to complete a project.
Often, they must be paid up front with no retention
guidelines in place. Retention plans also don't correct
problems when contractors are disingenuous or
dishonest about their work.

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