As we all know, retention is the proportion of money that the Client/Principal Contractor holds back as a 'lever' to persuade the sub-contractor to correct any defects that might become apparent after the contract has been signed.
A typical retention figure is 5% of the certified contract value. Half of this is released upon 'practical completion' of the project and the other half, after the defects libility period, providing the sub-contractor has corrected defective works.
So far, so good.
However, Principal Contractors are always trying to find ways of avoiding payment. A common one is the setting of increasingly longer defects liability timescales for the point at which retention should be released.
Another way, is not to automatically release the retention but to wait until for the sub-contractor to claim and even then try to ignore the sub-contractor's claim and hope that they will just 'go away'.
A common 'excuse' used by Principal COntractors is that they haven't achieved 'practical completion' on the project as a whole, so can't release any retentions (This could be on a project that has a 1-2 year programme!!)
Some unscrupulous Principal Contractors even make the absorption of sub-contractors retentions into their own profits part of their usual operating procedure. Often, sub-contractors are left with the only option of pursuing their claim through the Courts.
Time for a change in the law or time for sub-contractors not to sign up to sub-contracts with the type of terms that are designed to ensure that sub-contractors never see their retentions?