We are a demolition company that worked on a project and completed our scope of work 6 months ago. We are getting 5% retention release but the final 5% of retention per the contractor won't be released until the entire project is complete in another 3-4 months. Can they hold our funds indefinitely?
You ask if a GC can hold onto your Retainage indefinitely. Short Answer: No. Longer Answer: look at Section 20 of the Prompt Payment Act., 815 ILCS 603 (the "Act"), which applies to all contracts with retainage provisions.
Sec. 20 codifies the 10% cap to retainages and requires that once a contract is 50% complete the maximum retainage that may be withheld on the remainder is 5% of remaining payments.
In short, the statute says:
I hope this information has been helpful. Best of luck!
Thank you so much for the reply; however, I am asking about the final 5%, they have released 5% of the original 10% held. We asked for the final 5% and were told that they won't release it until the whole project is complete. Perhaps another three or four months.
Section 10 Sub. 2 of the Prompt Payment Act, 815 ILCS 603/10 states in pertinent part
(2) If a subcontractor has performed in accordance with the provisions of his contract .... and the work has been accepted by the owner... or contractor, then the contractor shall pay subcontractor... within 15 calendar days of the contractor's receipt from the owner... of each [payment] the full amount received for the work ...
In short, it looks like 15 days after the GC gets paid for your work. Of course, that is merely a general statement and circumstances may affect your right to payment.
As is always the case, I do not recommend you fight this battle alone. Find qualified Counsel and work with your lawyer. Good luck.