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Can a builder hold retention if its not in the cotract?

Im a General A licensed contractor, I do excavation grading and paving. I have an ongoing project that I have received payment on already. They are now saying that they want to hold retention. There was no stipulation about retention in our contract. Are they allowed to implement it even though it wasn't a part of our original agreement?

2 replies

Apr 9, 2020

IF your contract does not allow for the holding of retention, then most likely a 10% retention cannot be withheld, as it was not previously agreed. However, I have a qualification to my answer. If you are a subcontractor to a general contractor, your subcontract agreement could incorporate the prime contract between the owner and general. If that prime contract contains a retention provision and that contract is incorporated in your subcontract, the general could argue that you are bound by the prime contract's retention provision.

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Jan 25, 2021

hello Shawn, could you explain your answer further? Say I was working for a builder in scheme contract appointed on an hourly rate. the builder is holding a sum of money and now claiming they have to carry out reworks. are they entitled to hold this sum and should the contractor also be given the opportunity to rectify the works?

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