{
  "name": "Construction retainage limits by US state \u2014 maximum withholding percentages, release deadlines, escrow requirements, and public vs private distinctions with statutory citations",
  "description": "State-by-state comparison of the statutory rules governing retainage (retention) on construction contracts. Each record is one state with the maximum retainage percentage for public and private projects, the deadline for releasing retained funds after substantial completion, whether retainage must be held in an interest-bearing escrow account, whether the cap is reduced after a completion milestone (e.g. 50% complete), and the statutory citation. Caps range from 0% (New Mexico) to 10%, with a strong trend toward 5%. Answers 'how much retainage can be withheld on my project in [state]', 'when must retainage be released', and 'does my state require retainage escrow'.",
  "url": "https://referencesource.org/construction-retainage-limits-by-state/",
  "licence": "unknown",
  "last_verified": "2026-08-15",
  "stale_after": "2027-08-15",
  "sources": [
    "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10261.&lawCode=PCC",
    "https://constructioncoverage.com/glossary/retainage",
    "http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0255/Sections/0255.078.html",
    "https://www.leg.state.nv.us/nrs/nrs-338.html",
    "https://law.lis.virginia.gov/vacode/2.2-4333/"
  ],
  "records": [
    {
      "state": "California",
      "public_cap_pct": "5%",
      "private_cap_pct": "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",
      "statutory_citation": "Cal. Pub. Cont. Code \u00a7 10261",
      "id": "california",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/california/",
      "source": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10261.&lawCode=PCC",
      "source_quote": "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",
      "verified_fields": [
        "milestone_reduction"
      ]
    },
    {
      "state": "Connecticut",
      "public_cap_pct": "no statutory cap stated on this page",
      "private_cap_pct": "no statutory cap stated on this page",
      "release_deadline": "not stated on this page",
      "escrow_required": "public only",
      "milestone_reduction": "none",
      "statutory_citation": "not stated on this page",
      "id": "connecticut",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/connecticut/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "Some states, including Connecticut, Louisiana, Michigan, Ohio, and Tennessee, require retainage for certain state-funded public projects to be held in interest-bearing escrow accounts",
      "verified_fields": [
        "state"
      ]
    },
    {
      "state": "Florida",
      "public_cap_pct": "5%",
      "private_cap_pct": "no statutory cap",
      "release_deadline": "same time limits for payment of a payment request apply regardless of whether the payment request is for, or includes, retainage",
      "escrow_required": "no",
      "milestone_reduction": "none",
      "statutory_citation": "Fla. Stat. \u00a7 255.078",
      "id": "florida",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/florida/",
      "source": "http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0255/Sections/0255.078.html",
      "source_quote": "a public entity may withhold from each progress payment made to the contractor an amount not exceeding 5 percent of the payment as retainage."
    },
    {
      "state": "Louisiana",
      "public_cap_pct": "no statutory cap stated on this page",
      "private_cap_pct": "no statutory cap stated on this page",
      "release_deadline": "not stated on this page",
      "escrow_required": "yes",
      "milestone_reduction": "none",
      "statutory_citation": "not stated on this page",
      "id": "louisiana",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/louisiana/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "Some states, including Connecticut, Louisiana, Michigan, Ohio, and Tennessee, require retainage for certain state-funded public projects to be held in interest-bearing escrow accounts, providing additional security for contractors. This requirement does not typically extend to private projects, although some states, such as Tennessee and Louisiana, do mandate interest-bearing escrow accounts for private construction retainage.",
      "verified_fields": [
        "state"
      ]
    },
    {
      "state": "Michigan",
      "public_cap_pct": "no statutory cap stated on this page",
      "private_cap_pct": "no statutory cap stated on this page",
      "release_deadline": "not stated on this page",
      "escrow_required": "public only",
      "milestone_reduction": "none",
      "statutory_citation": "not stated on this page",
      "id": "michigan",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/michigan/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "Some states, including Connecticut, Louisiana, Michigan, Ohio, and Tennessee, require retainage for certain state-funded public projects to be held in interest-bearing escrow accounts",
      "verified_fields": [
        "state"
      ]
    },
    {
      "state": "Nevada",
      "public_cap_pct": "5%",
      "private_cap_pct": "no statutory cap",
      "release_deadline": "within 30 days after occupancy, use, or recording of notice of completion, whichever occurs first",
      "escrow_required": "no",
      "milestone_reduction": "after 50% of the work has been completed, the public body may pay remaining progress payments without withholding additional retainage",
      "statutory_citation": "NRS 338.515",
      "id": "nevada",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/nevada/",
      "source": "https://www.leg.state.nv.us/nrs/nrs-338.html",
      "source_quote": "Ninety-five percent of the amount of any progress payment must be paid and 5 percent withheld as retainage until 50 percent of the work required by the contract has been performed."
    },
    {
      "state": "New Mexico",
      "public_cap_pct": "0%",
      "private_cap_pct": "0%",
      "release_deadline": "not applicable",
      "escrow_required": "no",
      "milestone_reduction": "none",
      "statutory_citation": "N.M. Stat.",
      "id": "new-mexico",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/new-mexico/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "New Mexico prohibits retainage for most publicly and privately funded projects",
      "verified_fields": [
        "state"
      ]
    },
    {
      "state": "New York",
      "public_cap_pct": "5%",
      "private_cap_pct": "5%",
      "release_deadline": "not stated on this page",
      "escrow_required": "not stated on this page",
      "milestone_reduction": "none",
      "statutory_citation": "not stated on this page",
      "id": "new-york",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/new-york/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "a 5% cap is now the legal maximum in many states, including California and New York",
      "verified_fields": [
        "private_cap_pct",
        "public_cap_pct",
        "state"
      ]
    },
    {
      "state": "Ohio",
      "public_cap_pct": "no statutory cap stated on this page",
      "private_cap_pct": "no statutory cap stated on this page",
      "release_deadline": "not stated on this page",
      "escrow_required": "public only",
      "milestone_reduction": "none",
      "statutory_citation": "not stated on this page",
      "id": "ohio",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/ohio/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "Some states, including Connecticut, Louisiana, Michigan, Ohio, and Tennessee, require retainage for certain state-funded public projects to be held in interest-bearing escrow accounts",
      "verified_fields": [
        "state"
      ]
    },
    {
      "state": "Tennessee",
      "public_cap_pct": "no statutory cap stated on this page",
      "private_cap_pct": "no statutory cap stated on this page",
      "release_deadline": "not stated on this page",
      "escrow_required": "yes",
      "milestone_reduction": "none",
      "statutory_citation": "not stated on this page",
      "id": "tennessee",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/tennessee/",
      "source": "https://constructioncoverage.com/glossary/retainage",
      "source_quote": "Some states, including Connecticut, Louisiana, Michigan, Ohio, and Tennessee, require retainage for certain state-funded public projects to be held in interest-bearing escrow accounts, providing additional security for contractors. This requirement does not typically extend to private projects, although some states, such as Tennessee and Louisiana, do mandate interest-bearing escrow accounts for private construction retainage.",
      "verified_fields": [
        "state"
      ]
    },
    {
      "state": "Virginia",
      "public_cap_pct": "5%",
      "private_cap_pct": "no statutory cap",
      "release_deadline": "included in the final payment",
      "escrow_required": "no",
      "milestone_reduction": "none",
      "statutory_citation": "Va. Code \u00a7 2.2-4333",
      "id": "virginia",
      "url": "https://referencesource.org/construction-retainage-limits-by-state/virginia/",
      "source": "https://law.lis.virginia.gov/vacode/2.2-4333/",
      "source_quote": "the contractor shall be paid at least ninety-five percent of the earned sum when payment is due, with no more than five percent being retained to ensure faithful performance of the contract. All amounts withheld may be included in the final payment.",
      "verified_fields": [
        "escrow_required",
        "release_deadline"
      ]
    }
  ]
}