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Retainage In Florida Construction Projects: Answers To FAQs


By its nature, the lifecycle of a typical Florida construction project spans weeks, months, or years. During this time, contractors and property owners alike take on a certain amount of risk based upon their respective interests. The concept of “retainage,” i.e., withhold funds from the contractor, arose as a way to balance the interests of the parties through two objectives:

  1. Incentivizing the contractor to complete the project on time and within budget; and,
  2. Protecting the property owner against possible liens, delays, defaults, and other events.

Retainage has been a factor in Florida construction law for many years, but a recent legislative change offers an opportunity to provide updates and an overview. You can trust a Florida construction lawyer to address specific inquiries, but answers to FAQs on retainage are helpful.

What construction projects are covered? At the outset, note that the Florida statute on retainage only applies to public workers projects that are funded by a branch or division of state, county, or local government; plus, the law only covers projects where the total contract price is $200,000 or more. It does not affect:

  • Private projects;
  • Projects funded by federal government funds; and,
  • Any construction contract with the Florida Department of Transportation. 

How much can be retained by the public agency? As of the effective date October 1, 2020, the maximum amount that a government body can withhold is 5 percent over the course of the entire project. This change benefits contractors as compared to the previous version of the law, which allowed up to 10 percent retainage for each payment. 

Is there a time limit for how long the funds can be withheld? Yes, updates to retainage laws do NOT dispense with requirements under the Florida Prompt Payment Act. When the contract value is less than $10 million, the funds should be released within 30 days after substantial completion. Government bodies can request an extension for a maximum of 60 additional days for public works projects over $10 million. 

Can I request early release of retainage? The prior law allowed a contractor to make such a request when the project was more than halfway complete. This provision was removed, but lawmakers left the door open for contractors to request early release of retainage by contract. 

What is the process for recovering retainage? Contractor remedies for improper retention of funds are covered in the Florida Prompt Payment Act, which gives you the power to sue in court. Another option in some cases would be preparing a Notice of Nonpayment and/or filing a claim against the payment bond covering the public works project.

Our Palm Beach County Construction Attorneys Can Provide Additional Answers

Background information on retainage is useful for understanding the basics, but you will need personalized details and advice from an experienced lawyer to address real-life issues. To learn more about Florida laws on retainage in public construction contracts, please contact Linkhorst Law Firm, P.A. in Jupiter, FL. We can set up a consultation to review your circumstances and answer additional questions.


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