Retention Money Is Overdue

The scenario

Throughout the contract the customer retained a percentage of each payment — retention or 'retainage' — as security against defects. Practical completion happened, the defects-liability period ran its course, and any defects were rectified. The retention should now be released, often as a final lump sum. Instead, the release date has come and gone, and the customer is either silent or vaguely raising 'a few things to look at' that were never mentioned before.

Retention is your money, held conditionally. Once the contractual condition for its release is met, withholding it is no longer security — it is simply an overdue debt, and it should be pursued like one.

What's really going on

Retention disputes cluster around the release trigger. Your contract ties release to an event — practical completion plus a period, the issue of a final certificate, or the end of the defects-liability period. The customer may genuinely believe the trigger has not occurred, or they may be manufacturing late 'defects' to delay paying out money they have grown comfortable holding.

There is also a cash-flow reality: retention sitting in the customer's account is interest-free working capital for them, so some customers are slow to release it simply because it suits them. The longer it sits, the more it can feel like 'their' money. Your task is to convert a vague stall back into a clear, dated obligation by pinning down exactly which release trigger applies and proving it has been met.

Your options

• Pin the release trigger. Identify the exact contractual event that releases retention and the date it occurred.
• Demand release in writing. A clear letter citing the trigger, the date, and the amount converts a stall into a documented claim.
• Address alleged defects head-on. If late defects are raised, ask for them in writing with specifics, then respond — genuine items get fixed, manufactured ones get challenged.
• Use the contract's dispute path. Many contracts and security-of-payment regimes cover retention; the formal route may be quicker than you expect.
• Escalate the balance. Once the trigger is clearly met and no genuine defect remains, treat it as the overdue debt it is.

Recommended approach

Start by reading your own contract carefully to confirm precisely what releases the retention and when. Then write to the customer stating that trigger, the date it was satisfied, the retention amount, and a firm date for payment. If they respond with defects, insist on a written, specific list — a vague 'a few things' is not a defect notice. Rectify anything genuine promptly and document it, and squarely reject items that were never raised during the defects-liability period.

If the money is clearly due and the customer continues to hold it, retention is recoverable like any other debt — and in some industries through a security-of-payment process. You can refer the debt with the contract, completion records and correspondence attached. For background on documenting completion and entitlement, see the Academy lesson library.

What to avoid

Do not accept vague, late 'defects' as a reason to keep waiting — ask for specifics in writing, because genuine defects can be described and fixed while manufactured ones cannot. Avoid letting retention drift unclaimed past its release date on the assumption it will turn up; the longer it sits, the more entrenched the customer becomes. Never lose the records that prove practical completion and the defects-liability period — they are the backbone of the claim. This is general guidance, not legal advice. Retention provisions and security-of-payment rules vary by contract and jurisdiction, so take specialist advice before relying on a formal process.