# California — Construction retainage limits by US state — maximum withholding percentages, release deadlines, escrow requirements, and public vs private distinctions with statutory citations

For California, public project retainage cap (%) is 5%; private project retainage cap (%) is not addressed in this statute; release deadline is upon final completion and acceptance of the project; escrow required is not addressed in this statute; milestone reduction is after 95% of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, recorded from its source on 2026-08-15.

- **State:** California
- **Public project retainage cap (%):** 5%
- **Private project retainage cap (%):** not addressed in this statute
- **Release deadline:** upon final completion and acceptance of the project
- **Escrow required:** not addressed in this statute
- **Milestone reduction:** after 95% of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed _(verified: appears in the quote below)_
- **Statutory citation:** Cal. Pub. Cont. Code § 10261

## What the source says

> The department shall withhold not more than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed

## Source

- https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10261.&lawCode=PCC

Last verified: 2026-08-15. Review by: 2027-08-15.
Part of [Construction retainage limits by US state — maximum withholding percentages, release deadlines, escrow requirements, and public vs private distinctions with statutory citations](https://referencesource.org/construction-retainage-limits-by-state/).