Retention on Building Work: A Homeowner’s Guide

The case for a retention grows with the size and length of the job. On a larger project, such as an extension or a whole-house refurbishment, some defects only show themselves after a season or two: a crack as new plaster dries out, a door that sticks once the heating is on, a gutter joint that drips in the first heavy rain. A retention gives both sides a simple, agreed way of dealing with those.

On a small job the picture changes. If the whole job is a roof repair or a single rooflight, the amount held back would be small, and the paperwork and chasing involved can outweigh the benefit. A clear written warranty, from a contractor you have checked properly, usually does the same job with far less friction.

It also matters how the rest of the payment schedule is set up. If you are paying in stages as the work progresses, each payment is already tied to work you can see. A retention sits at the very end of that schedule, after the final payment.

The contractor will factor a retention into their price and cash flow. Waiting months for part of the money is a real cost to a small firm, so a fair retention is proportionate to the job and the risk, not the largest sum you can negotiate.

Raise it at quote stage. Ask for the retention before you accept, so the contractor can price it and include it in their terms. Our guide on what to do before accepting a quote covers the other things worth settling at the same point.

State the amount plainly. Write it as a sum of money, or as a clearly stated share of the final price, so there is no argument about the figure later.

Set the period. Agree how long it will be held, and from when. Completion is the usual starting point, so it helps to agree what completion means for your job.

Say what releases it. For example: the end of the period, plus any defects reported in writing during it having been put right. The clearer the trigger, the easier the release.

Agree what happens if defects are not dealt with. A contract can say that the retention may be put towards the cost of having reported defects put right by someone else. If that is the intention, it should be written down.

Keep it in writing. The retention should appear in the accepted quote or the contract, and on the final invoice, so everyone can see what has been held back and why. Our guide to what a building quote should include sets out where payment terms normally sit.

A retention works best when its release is treated as a normal, planned payment rather than a favour. Put the release date in your diary when the work is completed, and a week or two before it arrives, check whether anything has appeared that needs reporting.

If defects have come up during the period, report them in writing as soon as you notice them, with photographs and a short description of where they are. Waiting until the last day and presenting a long list tends to sour things. Reporting as you go gives the contractor a fair chance to deal with each item while it is small.

Once the period has ended and any reported items have been put right, pay the retention promptly and keep a record of the payment alongside the final invoice. Our guide to invoices and receipts for building work covers what to keep and why it is useful for years afterwards.

On a project paid in stages, the retention is simply the last line of the schedule. Staged payments explained shows how the earlier payments fit together, so the retention does not come as a surprise to either side.