Retention is your money, held by someone else

Retention is the slice of each payment the payer keeps back as security against defects and non completion. It is deducted from the gross value in every interim payment claim, and on a job of any size it adds up to a sum worth chasing hard. On an Irish contract the mechanism sits in the form, and the discipline sits with you.

How it is deducted

Each payment claim states the gross value of work done, and retention is taken as a percentage of that gross before the net sum falls due. The percentage and the cap are set by the contract, whether an RIAI form or a Public Works Contract under the Capital Works Management Framework. The important habit is to show the retention line clearly in the claim, so both sides see the same running figure and it never has to be reconstructed later.

• Deducted on the gross. Retention comes off the gross valuation, not the net movement, so it is visible in every claim.
• Held to a cap. The contract limits the total held, and once the cap is reached no further deduction should be taken.
• Released in stages. A first release commonly falls at completion, the balance at the end of the defects period.

Getting it back

Release is tied to events, not to the calendar alone. The first tranche typically falls due when the works reach completion, and the balance when the defects period ends and outstanding items are made good. Each release is itself a sum that becomes payable, so it runs through the same payment claim machinery the Construction Contracts Act 2013 governs. That means the release has to be claimed, dated from the payment claim date, and answered inside the response window like any other sum.

Why it slips

Retention is forgotten because the job is finished and everyone has moved on. The defects period runs quietly, the release date passes, and the money sits with a payer who has no reason to volunteer it. The surveyor who diaried both release dates at the start is the one who serves the claim on the day it falls due and gets paid. The one who waits to be reminded waits a long time.

The discipline

Record the retention deducted on every claim so the held balance is always current. Diary both release milestones from the day the contract is signed. When each falls due, claim it as a payment claim in its own right, and let the Act do the rest.