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Streetwise Answers

I am owed a significant amount of retention for various projects for the same Contractor. The total amounts to approx £25k, made up of amounts £25k average. The oldest project is over 3 years ago, the most recent approx 2 years. What is the best way to recover this money if the Contractor either fails to respond or rejects my claim by saying he has not recieved End of Defects/Final Payment from the (his) clients? Andy McDonough Peterborough


Hi Andy

"How can I recover retention monies?" is a common question we get asked.

Regrettably your situation is not uncommon as a good many Contractors hold on to retention long after they should have released it to their sub-contractors. The late payment of retention monies is a real problem for Specialist Sub-Contractors.

You may be re-assured to know that the older the retention account is, the easier it should be to collect. That is provided the Contractor's business survives long enough to pay it out!

The reason I say "old retention monies" should be easier to collect is because the older the retention account is the less likelihood there is that there is a genuine or legally valid reason for hanging on to it.

You say the retention is all owed by one Contractotor but over several projects. The first thing you need to check is what each of these contracts say about the deduction and release of retention.

If they are silent about retention then your argument is that the Contractor has no right to deduct retention in any event!

Assuming that there are express provisions for the deduction of retention monies then these should be checked to see exactly what they say.

You may also like to check out our page on retentions which you can find here; Retention in Construction and Engineering Contracts

Usually, the first moeity (posh word for half) is released at Practical Completion. Ideally from the Specialist Sub-Contractor's point of view that should be practical completion of the sub-contract works, rather than practical completion of the Main Contract works.

The release of the second moeity of retention is usually linked to the receipt by the Contractor of the Making Good of Defects issued under the Main Contract. Unfortunately, you don't know when this takes place or what is preventing it from happening.

It is not unknown for a Contractor to simply lie about this so he can hold on to the money! Harsh, but true!! 

If the Construction Act applies, and release of the second moeity of retention is linked to the issue of a Making Good Defects Certificate, and the only reason the Contractor gives for holding on to your retention money is that the certificate has not been issued, then you can use the argument that the terms do not comply with the Act and therefore the Scheme for Construction applies.

If you need to know more then please give me a call or send me an e-mail.

Best regards

Barry

 

 


Posted by: barryashmore - Return

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