In the construction industry, “retainage”—the practice of withholding by an owner or contractor a portion of the funds that are due to a contractor or subcontractor for a construction project until its completion—is a term frequently negotiated in contracts for private construction projects as a means to mitigate the risk of default since the monies withheld can be used to correct or complete defective or deficient work on a project. Washington Senate Bill (SB) 5528 largely mimics existing requirements on retainage for public works projects in imposing a limit on the percentage of retainage withheld from contractors on private construction projects. In my latest column for the Daily Journal of Commerce, I provide some context for owners and general contractors to understand their obligations under the new law, as well as the potential impact these changes may have on their construction contracts executed on or after the date SB 5528 went into effect, July 23, 2023.
Read the full column here.
Originally published by the Daily Journal of Commerce on August 18, 2023.