Retention under NEC: only if X16 says so
A JCT surveyor moving to NEC carries an assumption that costs money in both directions. NEC has no retention unless the contract chose to have it, and where it does, the mechanism is not the one you are used to.
QScope Team · 18 July 2026 · 6 min read
Under JCT, retention is there unless the particulars remove it. Under NEC, it is the other way round. There is no retention at all unless secondary Option X16 has been included in the contract. If X16 is not there, deducting retention is deducting money you have no right to hold. If X16 is there and you forget it, you have overpaid.
Both errors are common, and both come from the same place: treating NEC as JCT with different words. The words are different because the mechanism is different, and retention is one of the clearest examples.
What X16 actually sets up
Where Option X16 applies, the Contract Data states two figures that decide everything:
- A retention free amount, below which no retention is deducted at all
- A retention percentage, applied once the Price for Work Done to Date passes that amount
The retention free amount is the part people miss. On a job where it is set at a meaningful figure, early assessments carry no retention, and it starts only once the value certified passes the threshold. Applying the percentage from the first assessment, as JCT habit suggests, over-deducts at the start of the job.
The release is at Completion and the Defects Certificate
This is where the JCT muscle memory misfires. NEC does not release retention at practical completion and the end of a rectification period, because NEC does not use those terms.
Under X16, the amount retained is halved in the assessment made at Completion of the whole of the works, and the remaining half is released in the assessment after the Defects Certificate is issued. The shape is familiar, two stages, but the triggers are the NEC ones, and they arrive on the NEC calendar.
| Stage | JCT habit | NEC (X16) |
|---|---|---|
| First release | Practical completion | Completion of the whole of the works |
| Final release | End of rectification period | After the Defects Certificate |
Completion under NEC has its own definition, tied to what the Works Information or Scope requires by the Completion Date, and it is not always the same moment a JCT surveyor would call practical completion. The Defects Certificate is issued at the later of the defects date and the date the last notified defect is corrected. Reading those two definitions in the contract is worth more than assuming the JCT equivalents apply.
Retention and the compensation event
Retention is deducted on the Price for Work Done to Date. As compensation events are assessed and change the Prices, the value certified moves, and the retention held moves with it. That is arithmetic, not a separate decision.
What does not change is the free amount and the percentage. Those are set once in the Contract Data and do not shift because a compensation event has been agreed. If the retention held looks wrong after a large compensation event, the figure to check is the Price for Work Done to Date, not the retention terms.
The thirty-second check on any NEC assessment
- Is Option X16 in the contract at all? If not, there is no retention to deduct
- Has the Price for Work Done to Date passed the retention free amount yet?
- Is the percentage the one in the Contract Data, not a JCT rate from memory?
- At Completion, has half been released, with the balance held for the Defects Certificate?
Retention under NEC is not complicated once the X16 terms are in front of you. It goes wrong when it is run from JCT habit, because every one of those habits has an NEC answer that is close enough to look right and different enough to be wrong.
QScope applies retention under NEC only when you set it, at the percentage and free amount your contract states, and releases it at Completion and the Defects Certificate rather than at practical completion.