When Retainage Disputes Arise, It’s Important To Work With An Experienced Lawyer
Once a contract for a construction project has been agreed upon, the lender (bank or owner) will periodically make progress payments to contractors throughout the various stages of completion.
What Is Retainage?
As the project continues to move forward, the owner, in many cases, is contractually entitled to hold 10 percent of every payment made as part of the retainage. Disputes often arise surrounding the release of retainage. These funds serve as an incentive for contractors to finish the project thoroughly and correctly, and to pay their subcontractors. When substantial completion occurs, part or all of the retainage is released to the contractor, based upon the terms of the contract.
Unfortunately, disputes often arise if the owner is not happy with the work or if the contractor is not paying the subcontractors. As a result, the owner may not want to release the retainage. If an owner gets phone calls from subcontractors stating that they haven’t been paid and the prospect of liens enters the picture, the owner has another reason not to pay the contractor.
Conversely, the retainage may be large and an owner may attempt to pay the original contractor a smaller final payment by holding onto the retainage and calling in another contractor to finish the work for less than the remaining retainage. Sometimes the owner may even try to cut deals directly with subcontractors. From both the owner and the contractor’s point of view, however, it’s important to complete the project on time, without defects, without going over the budget and without any liens.
When these complex retainage disputes arise, it’s critical to partner with an experienced lawyer to resolve the disputes and arrive at an ideal outcome.
We Resolve Retainage Disputes
The New York and New Jersey Law Offices of Michael P. Berkley, P.C., have been working with retainage issues for more than 28 years. We are ready to represent owners or contractors in any retainage-related dispute. We bring comprehensive knowledge of contracts to every case. We will scrutinize the documentation and work with necessary experts to help clients arrive at an ideal outcome to their situation.