Retention is a percentage of each interim payment, commonly three to five per cent, withheld by the paying party as security for the correction of defects. The standard pattern releases half at practical completion and the remaining half at the end of the rectification period, once making good has been certified.
In principle it protects the employer against the cost of defects the contractor fails to put right. In practice it is one of the industry’s longest-running sore points, because the money sits with the payer and release depends on the payer’s administration. Down the supply chain the sums are small individually and large in aggregate, and chasing them consumes commercial time long after jobs finish.
The risks are well documented: retention released late or forgotten entirely once site teams disperse, release resisted on the strength of defects that were never notified, and the hard case of insolvency, where retention held by a failed payer is rarely ring-fenced and often lost. Reform, from retention deposit schemes to outright abolition, has been debated for years, and some clients and contractors now deal on zero-retention terms with other security such as retention bonds in its place.
Under JCT contracts retention is deducted at the stated percentage, with half released on practical completion and the balance following the certificate of making good. Whatever the form, the release conditions are factual: has practical completion occurred, were defects notified within the period, were they made good. Those are questions of record, not opinion.
That is why clean records shorten retention arguments. A dated completion record, a defects list with photographs, and evidence of close-out reduce release to arithmetic. The subcontractor who can show the state of the works and the history of every notified defect collects; the one relying on memory negotiates.
Construction Metric keeps that completion and close-out evidence building automatically from the site WhatsApp group: see how it works.