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Are you entitled to unpaid retention money?

View profile for Peter Allen
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The focus of many sub-contractors at the end of a construction contract will be to conclude works free from defects, and to have final accounts approved in anticipation of payment. Attention will then quickly turn to the next contract. It is therefore no surprise that monies withheld by main contractors as retentions often slip through the net and are never repaid.

Money is withheld on retention in most construction contracts to protect employers and main contractors against defects in the works. This is often 5% of the total cost until completion. After completion it is usually 2.5% and might not be due until after the default liability period, which could be as long as 24 months following completion. 

We have recently been approached by a number of sub-contractors seeking to reclaim unpaid retentions. Many had struggled to effectively contact the contractors, either receiving unsatisfactory responses or simply being ignored. Some sub-contractors were due tens of thousands of pounds, which should have been repaid almost five years ago.

With our assistance reviewing their documentation and preparing a Statutory Demand, many clients have successfully reclaimed the money to which they were entitled. In most cases this was repaid within 21 days of our first communication with the employer or main contractor. 

To claim for an unpaid retention, it is necessary to consider whether the procedures in the contract are adhered to. In the absence of a written agreement between the parties, terms are implied into construction contracts under the Scheme for Construction Contracts (England and Wales) Regulations 1998. 

If you require any assistance with claiming unpaid retention money, our specialist construction team can assist with this. Please contact Peter Allen on 01245 453813 or peter.allen@birkettlong.co.uk in the first instance.