https://ceopedia.org/index.php?title=Retention_money&feed=atom&action=historyRetention money - Revision history2024-03-29T15:06:02ZRevision history for this page on the wikiMediaWiki 1.39.4https://ceopedia.org/index.php?title=Retention_money&diff=96274&oldid=prevSw: Text cleaning2023-11-18T02:48:29Z<p>Text cleaning</p>
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<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 03:48, 18 November 2023</td>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Release of retention is another important item or milestone in any construction contract which is also an indication of completion of the scope of the project up to the mentioned stages. Usually, retention monies are released in 2 stages of the project. The first half of the retention monies [[needs]] to be certified and released at the time of issuing the Completion [[Certificate]]. If there is any outstanding work for the project, those will be stated in the Completion Certificate. A reasonable [[cost]] will be deducted from the retention money to cover the costs of completing the remaining work by a 3rd party if the contractor doesn't accept to complete the rejected work or any outstanding work. The second half of retention monies will be certified and released upon the expiry of defects liability period. In most construction contracts, the defects liability period is 12 months which the contractor is liable to complete any defects arise due to the poor workmanship. Upon issuance of Maintenance Certificate, the 2nd half of retention money will be released<ref>R. Pettigrew 2005, p.32</ref>.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Release of retention is another important item or milestone in any construction contract which is also an indication of completion of the scope of the project up to the mentioned stages. Usually, retention monies are released in 2 stages of the project. The first half of the retention monies [[needs]] to be certified and released at the time of issuing the Completion [[Certificate]]. If there is any outstanding work for the project, those will be stated in the Completion Certificate. A reasonable [[cost]] will be deducted from the retention money to cover the costs of completing the remaining work by a 3rd party if the contractor doesn't accept to complete the rejected work or any outstanding work. The second half of retention monies will be certified and released upon the expiry of defects liability period. In most construction contracts, the defects liability period is 12 months which the contractor is liable to complete any defects arise due to the poor workmanship. Upon issuance of Maintenance Certificate, the 2nd half of retention money will be released<ref>R. Pettigrew 2005, p.32</ref>.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>== Footnotes ==</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>==Footnotes==</div></td></tr>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>{{infobox5|list1={{i5link|a=[[Certificate for payment]]}} &mdash; {{i5link|a=[[Interim certificate]]}} &mdash; {{i5link|a=[[Retention bond]]}} &mdash; {{i5link|a=[[Certificate of substantial completion]]}} &mdash; {{i5link|a=[[Advance payment bond]]}} &mdash; {{i5link|a=[[Bidding documents]]}} &mdash; {{i5link|a=[[Certificate of acceptance]]}} &mdash; {{i5link|a=[[Indemnity bond]]}} &mdash; {{i5link|a=[[Consent order]]}} }}</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>{{infobox5|list1={{i5link|a=[[Certificate for payment]]}} &mdash; {{i5link|a=[[Interim certificate]]}} &mdash; {{i5link|a=[[Retention bond]]}} &mdash; {{i5link|a=[[Certificate of substantial completion]]}} &mdash; {{i5link|a=[[Advance payment bond]]}} &mdash; {{i5link|a=[[Bidding documents]]}} &mdash; {{i5link|a=[[Certificate of acceptance]]}} &mdash; {{i5link|a=[[Indemnity bond]]}} &mdash; {{i5link|a=[[Consent order]]}} }}</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>==References ==</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>==References==</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Baker E., Mellors B., (2013). ''[https://books.google.pl/books?id=FZY3AAAAQBAJ&dq=retention+money+PURPOSE&hl=pl&source=gbs_navlinks_s FIDIC Contracts: Law and Practice]'', CRC Press, London.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Baker E., Mellors B., (2013). ''[https://books.google.pl/books?id=FZY3AAAAQBAJ&dq=retention+money+PURPOSE&hl=pl&source=gbs_navlinks_s FIDIC Contracts: Law and Practice]'', CRC Press, London.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Hök G., Jaeger A., (2009). ''[https://books.google.pl/books?id=NmH_KZlOHdgC&dq=retention+money+definition&hl=pl&source=gbs_navlinks_s FIDIC - A Guide for Practitioners]'', Springer Science & Business Media, Berlin.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Hök G., Jaeger A., (2009). ''[https://books.google.pl/books?id=NmH_KZlOHdgC&dq=retention+money+definition&hl=pl&source=gbs_navlinks_s FIDIC - A Guide for Practitioners]'', Springer Science & Business Media, Berlin.</div></td></tr>
</table>Swhttps://ceopedia.org/index.php?title=Retention_money&diff=95027&oldid=prevSw: Infobox5 upgrade2023-11-18T00:49:29Z<p>Infobox5 upgrade</p>
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<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 01:49, 18 November 2023</td>
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<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;"><li>[[Consent order]]</li></del></div></td><td colspan="2" class="diff-side-added"></td></tr>
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<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;"></del></div></td><td colspan="2" class="diff-side-added"></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;"></del></div></td><td colspan="2" class="diff-side-added"></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Retention [[money]]''' is described as the sum of money held by the employer as a safeguard for any defective or non-conforming [[work]] by the contractor. Retention money safeguards the employer by defects which can occur during the defects liability period if the contractor doesn't response according to the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref>.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Retention [[money]]''' is described as the sum of money held by the employer as a safeguard for any defective or non-conforming [[work]] by the contractor. Retention money safeguards the employer by defects which can occur during the defects liability period if the contractor doesn't response according to the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref>.</div></td></tr>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>== References ==</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">{{infobox5|list1={{i5link|a=[[Certificate for payment]]}} &mdash; {{i5link|a=[[Interim certificate]]}} &mdash; {{i5link|a=[[Retention bond]]}} &mdash; {{i5link|a=[[Certificate of substantial completion]]}} &mdash; {{i5link|a=[[Advance payment bond]]}} &mdash; {{i5link|a=[[Bidding documents]]}} &mdash; {{i5link|a=[[Certificate of acceptance]]}} &mdash; {{i5link|a=[[Indemnity bond]]}} &mdash; {{i5link|a=[[Consent order]]}} }}</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>==References ==</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Baker E., Mellors B., (2013). ''[https://books.google.pl/books?id=FZY3AAAAQBAJ&dq=retention+money+PURPOSE&hl=pl&source=gbs_navlinks_s FIDIC Contracts: Law and Practice]'', CRC Press, London.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Baker E., Mellors B., (2013). ''[https://books.google.pl/books?id=FZY3AAAAQBAJ&dq=retention+money+PURPOSE&hl=pl&source=gbs_navlinks_s FIDIC Contracts: Law and Practice]'', CRC Press, London.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Hök G., Jaeger A., (2009). ''[https://books.google.pl/books?id=NmH_KZlOHdgC&dq=retention+money+definition&hl=pl&source=gbs_navlinks_s FIDIC - A Guide for Practitioners]'', Springer Science & Business Media, Berlin.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>* Hök G., Jaeger A., (2009). ''[https://books.google.pl/books?id=NmH_KZlOHdgC&dq=retention+money+definition&hl=pl&source=gbs_navlinks_s FIDIC - A Guide for Practitioners]'', Springer Science & Business Media, Berlin.</div></td></tr>
</table>Swhttps://ceopedia.org/index.php?title=Retention_money&diff=87095&oldid=prev127.0.0.1: The LinkTitles extension automatically added links to existing pages (<a target="_blank" rel="noreferrer noopener" class="external free" href="https://github.com/bovender/LinkTitles">https://github.com/bovender/LinkTitles</a>).2023-03-20T14:24:49Z<p>The LinkTitles extension automatically added links to existing pages (<a target="_blank" rel="noreferrer noopener" class="external free" href="https://github.com/bovender/LinkTitles">https://github.com/bovender/LinkTitles</a>).</p>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Purpose of retention money==</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Purpose of retention money==</div></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>The '''purpose''' of retention money is, in significant part, to provide security, in the form of a source of funds, against the contractor's failure to complete any work outstanding when the works are taken over and to remedy any defects or damage and in respect of any other liability of the contractor to the employer. In general, retention money provides protection to the employer. Retention money gives the idea of importance of completing the signed [[project]] as per it's terms and designs. With such retention held, the contractor takes the responsibility to complete the construction project as per the design and [[quality]] stated in the initial contract<ref>E. Baker, B. Mellors 2013, p.393</ref>.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>The '''purpose''' of retention money is, in significant part, to provide security, in the form of a source of funds, against the contractor's failure to complete any work outstanding when the works are taken over and to remedy any defects or damage and in respect of any other liability of the contractor to the employer. In general, retention money provides protection to the employer. Retention money gives the idea of importance of completing the signed [[project]] as per it's terms and designs. With such retention held, the contractor takes the responsibility to complete the <ins style="font-weight: bold; text-decoration: none;">[[</ins>construction project<ins style="font-weight: bold; text-decoration: none;">]] </ins>as per the design and [[quality]] stated in the initial contract<ref>E. Baker, B. Mellors 2013, p.393</ref>.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Example of retention money==</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Example of retention money==</div></td></tr>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The rules and regulations regarding the treatment of retention money can vary depending on the country and the [[industry]]. In general, retention money must be held in a separate account, and the employer or client is responsible for ensuring that the funds are used appropriately.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The rules and regulations regarding the treatment of retention money can vary depending on the country and the [[industry]]. In general, retention money must be held in a separate account, and the employer or client is responsible for ensuring that the funds are used appropriately.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>In construction industry, some countries have laws that require employers or clients to pay interest on retention money held, to ensure that the contractor or [[supplier]] is not unduly penalized for the employer's or client's delay in releasing the funds.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>In construction industry, some countries have laws that require employers or clients to pay <ins style="font-weight: bold; text-decoration: none;">[[</ins>interest<ins style="font-weight: bold; text-decoration: none;">]] </ins>on retention money held, to ensure that the contractor or [[supplier]] is not unduly penalized for the employer's or client's delay in releasing the funds.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>In some countries, the retention money can only be released once the contractor or supplier has provided a [[bond]], letter of credit, or other form of security to guarantee that they will complete the work as required.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>In some countries, the retention money can only be released once the contractor or supplier has provided a [[bond]], letter of credit, or other form of security to guarantee that they will complete the work as required.</div></td></tr>
</table>127.0.0.1https://ceopedia.org/index.php?title=Retention_money&diff=84685&oldid=prevSw: Infobox update2023-03-19T23:11:15Z<p>Infobox update</p>
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<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 00:11, 20 March 2023</td>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><ul></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><ul></div></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><li>[[Certificate <del style="font-weight: bold; text-decoration: none;">of satisfaction</del>]]</li></div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><li>[[Certificate <ins style="font-weight: bold; text-decoration: none;">for payment</ins>]]</li></div></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><li>[[<del style="font-weight: bold; text-decoration: none;">Provisional sum</del>]]</li></div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><li>[[<ins style="font-weight: bold; text-decoration: none;">Interim certificate</ins>]]</li></div></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><li>[[<del style="font-weight: bold; text-decoration: none;">Indemnity </del>bond]]</li></div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><li>[[<ins style="font-weight: bold; text-decoration: none;">Retention </ins>bond<ins style="font-weight: bold; text-decoration: none;">]]</li></ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"><li>[[Certificate of substantial completion</ins>]]</li></div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><li>[[Advance payment bond]]</li></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><li>[[Advance payment bond]]</li></div></td></tr>
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<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;"><li>[[Substantial completion]]</li></del></div></td><td colspan="2" class="diff-side-added"></td></tr>
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<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"><li>[[Indemnity bond]]</li></ins></div></td></tr>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div></ul></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div></ul></div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>}}</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>}}</div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Retention [[money]]''' is described as the sum of money held by the employer as a safeguard for any defective or non-conforming [[work]] by the contractor. Retention money safeguards the employer by defects which can occur during the defects liability period if the contractor doesn't response according to the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref>.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Retention [[money]]''' is described as the sum of money held by the employer as a safeguard for any defective or non-conforming [[work]] by the contractor. Retention money safeguards the employer by defects which can occur during the defects liability period if the contractor doesn't response according to the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref>.</div></td></tr>
</table>Swhttps://ceopedia.org/index.php?title=Retention_money&diff=70163&oldid=prev127.0.0.1: The LinkTitles extension automatically added links to existing pages (<a target="_blank" rel="noreferrer noopener" class="external free" href="https://github.com/bovender/LinkTitles">https://github.com/bovender/LinkTitles</a>).2023-01-23T06:57:18Z<p>The LinkTitles extension automatically added links to existing pages (<a target="_blank" rel="noreferrer noopener" class="external free" href="https://github.com/bovender/LinkTitles">https://github.com/bovender/LinkTitles</a>).</p>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Example of retention money==</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Example of retention money==</div></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>An example of retention money in practice would be a construction project where a contractor is hired to build a new office building for a client. The client agrees to pay the contractor a total of $10 million for the work, but agrees to hold back 5% ($500,000) of the contract value as retention money.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>An example of retention money in practice would be a construction project where a contractor is hired to build a new office building for a <ins style="font-weight: bold; text-decoration: none;">[[</ins>client<ins style="font-weight: bold; text-decoration: none;">]]</ins>. The client agrees to pay the contractor a total of $10 million for the work, but agrees to hold back 5% ($500,000) of the contract value as retention money.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>The contractor begins work on the building and completes it on schedule. However, during the final inspection, the client discovers that there are some minor defects in the building, such as a few cracked tiles and a leaky faucet. The client informs the contractor of the issues and gives them a deadline to fix them.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>The contractor begins work on the building and completes it on schedule. However, during the <ins style="font-weight: bold; text-decoration: none;">[[</ins>final inspection<ins style="font-weight: bold; text-decoration: none;">]]</ins>, the client discovers that there are some minor defects in the building, such as a few cracked tiles and a leaky faucet. The client informs the contractor of the issues and gives them a deadline to fix them.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Once the contractor has made the necessary repairs and the client is satisfied that the building meets the required standards, the client releases the retention money to the contractor. In this example, the retention money served as a financial incentive for the contractor to complete the work to the required standards, and as a form of security for the client in case the contractor failed to complete the work as required.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Once the contractor has made the necessary repairs and the client is satisfied that the building meets the required standards, the client releases the retention money to the contractor. In this example, the retention money served as a financial incentive for the contractor to complete the work to the required standards, and as a form of security for the client in case the contractor failed to complete the work as required.</div></td></tr>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The intention is that the retention money should, in effect, be set aside as a separate fund to be used only for the purpose of providing the employer with security against the making good of defects, and the purpose of making the employer a trustee is to protect the retention money against his liquidation<ref>A. Speaignt, G. Stone 2014, p.84</ref>. </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The intention is that the retention money should, in effect, be set aside as a separate fund to be used only for the purpose of providing the employer with security against the making good of defects, and the purpose of making the employer a trustee is to protect the retention money against his liquidation<ref>A. Speaignt, G. Stone 2014, p.84</ref>. </div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>The rules and regulations regarding the treatment of retention money can vary depending on the country and the industry. In general, retention money must be held in a separate account, and the employer or client is responsible for ensuring that the funds are used appropriately.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>The rules and regulations regarding the treatment of retention money can vary depending on the country and the <ins style="font-weight: bold; text-decoration: none;">[[</ins>industry<ins style="font-weight: bold; text-decoration: none;">]]</ins>. In general, retention money must be held in a separate account, and the employer or client is responsible for ensuring that the funds are used appropriately.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>In construction industry, some countries have laws that require employers or clients to pay interest on retention money held, to ensure that the contractor or supplier is not unduly penalized for the employer's or client's delay in releasing the funds.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>In construction industry, some countries have laws that require employers or clients to pay interest on retention money held, to ensure that the contractor or <ins style="font-weight: bold; text-decoration: none;">[[</ins>supplier<ins style="font-weight: bold; text-decoration: none;">]] </ins>is not unduly penalized for the employer's or client's delay in releasing the funds.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>In some countries, the retention money can only be released once the contractor or supplier has provided a bond, letter of credit, or other form of security to guarantee that they will complete the work as required.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>In some countries, the retention money can only be released once the contractor or supplier has provided a <ins style="font-weight: bold; text-decoration: none;">[[</ins>bond<ins style="font-weight: bold; text-decoration: none;">]]</ins>, letter of credit, or other form of security to guarantee that they will complete the work as required.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The rules also specify the time frame for the release of retention money, for example, in the United Kingdom the retention money must be released by the employer or client no later than the final date for payment under the contract, unless there are legitimate grounds for withholding it.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The rules also specify the time frame for the release of retention money, for example, in the United Kingdom the retention money must be released by the employer or client no later than the final date for payment under the contract, unless there are legitimate grounds for withholding it.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>It is important to note that the rules and regulations regarding the treatment of retention money may also be included in the contract between the employer or client and the contractor or supplier, so it's important to review the contract before starting a project.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>It is important to note that the rules and regulations regarding the treatment of retention money may also be included in the contract between the employer or client and the contractor or supplier, so it's important to review the contract before <ins style="font-weight: bold; text-decoration: none;">[[</ins>starting a project<ins style="font-weight: bold; text-decoration: none;">]]</ins>.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Release of retention in construction contract==</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>==Release of retention in construction contract==</div></td></tr>
</table>127.0.0.1https://ceopedia.org/index.php?title=Retention_money&diff=70153&oldid=prevSw at 06:39, 23 January 20232023-01-23T06:39:39Z<p></p>
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<td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 07:39, 23 January 2023</td>
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<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">'''Retention [[money]]''' is described as the sum of money held by the employer as a safeguard for any defective or non-conforming [[work]] by the contractor. Retention money safeguards the employer by defects which can occur during the defects liability period if the contractor doesn't response according to the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref>.</ins></div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">==Purpose of retention money==</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">The '''purpose''' of retention money is, in significant part, to provide security, in the form of a source of funds, against the contractor's failure to complete any work outstanding when the works are taken over and to remedy any defects or damage and in respect of any other liability of the contractor to the employer. In general, retention money provides protection to the employer. Retention money gives the idea of importance of completing the signed [[project]] as per it's terms and designs. With such retention held, the contractor takes the responsibility to complete the construction project as per the design and [[quality]] stated in the initial contract<ref>E. Baker, B. Mellors 2013, p.393</ref>.</ins></div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;">'''Retention [[</del>money<del style="font-weight: bold; text-decoration: none;">]]''' is described as the sum </del>of money <del style="font-weight: bold; text-decoration: none;">held by </del>the <del style="font-weight: bold; text-decoration: none;">employer as </del>a <del style="font-weight: bold; text-decoration: none;">safeguard </del>for <del style="font-weight: bold; text-decoration: none;">any defective or non-conforming [[</del>work<del style="font-weight: bold; text-decoration: none;">]] by </del>the contractor. <del style="font-weight: bold; text-decoration: none;">Retention money safeguards </del>the <del style="font-weight: bold; text-decoration: none;">employer by </del>defects <del style="font-weight: bold; text-decoration: none;">which can occur during </del>the <del style="font-weight: bold; text-decoration: none;">defects liability period if </del>the contractor <del style="font-weight: bold; text-decoration: none;">doesn't response according </del>to <del style="font-weight: bold; text-decoration: none;">the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref></del>.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">==Example of retention </ins>money<ins style="font-weight: bold; text-decoration: none;">==</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">An example </ins>of <ins style="font-weight: bold; text-decoration: none;">retention </ins>money <ins style="font-weight: bold; text-decoration: none;">in practice would be a construction project where a contractor is hired to build a new office building for a client. The client agrees to pay </ins>the <ins style="font-weight: bold; text-decoration: none;">contractor </ins>a <ins style="font-weight: bold; text-decoration: none;">total of $10 million </ins>for <ins style="font-weight: bold; text-decoration: none;">the </ins>work<ins style="font-weight: bold; text-decoration: none;">, but agrees to hold back 5% ($500,000) of </ins>the <ins style="font-weight: bold; text-decoration: none;">contract value as retention money.</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">The </ins>contractor <ins style="font-weight: bold; text-decoration: none;">begins work on the building and completes it on schedule</ins>. <ins style="font-weight: bold; text-decoration: none;">However, during the final inspection, </ins>the <ins style="font-weight: bold; text-decoration: none;">client discovers that there are some minor </ins>defects <ins style="font-weight: bold; text-decoration: none;">in </ins>the <ins style="font-weight: bold; text-decoration: none;">building, such as a few cracked tiles and a leaky faucet. The client informs </ins>the contractor <ins style="font-weight: bold; text-decoration: none;">of the issues and gives them a deadline </ins>to <ins style="font-weight: bold; text-decoration: none;">fix them</ins>.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;">== Purpose of retention money ==</del></div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">Once the contractor has made the necessary repairs and the client </ins>is <ins style="font-weight: bold; text-decoration: none;">satisfied that the building meets </ins>the <ins style="font-weight: bold; text-decoration: none;">required standards</ins>, the <ins style="font-weight: bold; text-decoration: none;">client releases </ins>the <ins style="font-weight: bold; text-decoration: none;">retention money </ins>to the contractor. In <ins style="font-weight: bold; text-decoration: none;">this example</ins>, <ins style="font-weight: bold; text-decoration: none;">the </ins>retention money <ins style="font-weight: bold; text-decoration: none;">served as a financial incentive for the contractor </ins>to <ins style="font-weight: bold; text-decoration: none;">complete </ins>the <ins style="font-weight: bold; text-decoration: none;">work to </ins>the <ins style="font-weight: bold; text-decoration: none;">required standards, and as a form </ins>of <ins style="font-weight: bold; text-decoration: none;">security for </ins>the <ins style="font-weight: bold; text-decoration: none;">client in case </ins>the contractor <ins style="font-weight: bold; text-decoration: none;">failed </ins>to complete the <ins style="font-weight: bold; text-decoration: none;">work </ins>as <ins style="font-weight: bold; text-decoration: none;">required</ins>.</div></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><del style="font-weight: bold; text-decoration: none;">The '''purpose''' of retention money </del>is<del style="font-weight: bold; text-decoration: none;">, in significant part, to provide security, in </del>the <del style="font-weight: bold; text-decoration: none;">form of a source of funds</del>, <del style="font-weight: bold; text-decoration: none;">against </del>the <del style="font-weight: bold; text-decoration: none;">contractor's failure to complete any work outstanding when </del>the <del style="font-weight: bold; text-decoration: none;">works are taken over and </del>to <del style="font-weight: bold; text-decoration: none;">remedy any defects or damage and in respect of any other liability of </del>the contractor <del style="font-weight: bold; text-decoration: none;">to the employer</del>. In <del style="font-weight: bold; text-decoration: none;">general</del>, retention money <del style="font-weight: bold; text-decoration: none;">provides protection </del>to the <del style="font-weight: bold; text-decoration: none;">employer. Retention money gives </del>the <del style="font-weight: bold; text-decoration: none;">idea </del>of <del style="font-weight: bold; text-decoration: none;">importance of completing </del>the <del style="font-weight: bold; text-decoration: none;">signed [[project]] as per it's terms and designs. With such retention held, </del>the contractor <del style="font-weight: bold; text-decoration: none;">takes the responsibility </del>to complete the <del style="font-weight: bold; text-decoration: none;">construction project </del>as <del style="font-weight: bold; text-decoration: none;">per the design and [[quality]] stated in the initial contract<ref>E. Baker, B. Mellors 2013, p.393</ref></del>.</div></td><td colspan="2" class="diff-side-added"></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>== Amount and limit of retention money ==</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>==Amount and limit of retention money==</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Amount and limit of retention money<ref>E. Baker, B. Mellors 2013, p.393</ref>:</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Amount and limit of retention money<ref>E. Baker, B. Mellors 2013, p.393</ref>:</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div># The percentage to be applied to the contract value of the works executed to calculate the amount to be retained is the percentage of retention stated in the relevant contract document. The FIDIC forms also provide for the possibility of a limit of the retention money to be specified in the relevant contract document. </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div># The percentage to be applied to the contract value of the works executed to calculate the amount to be retained is the percentage of retention stated in the relevant contract document. The FIDIC forms also provide for the possibility of a limit of the retention money to be specified in the relevant contract document. </div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div># If no limit is specified, the amount that the employer will be entitled to retain will simply be the percentage of the total contract value of the works. The ESCL research referred to above revealed typical amounts of 5% certified amounts in France, Greece and the Netherlands and 5% to 10% of the contract sum in Germany and Switzerland. </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div># If no limit is specified, the amount that the employer will be entitled to retain will simply be the percentage of the total contract value of the works. The ESCL research referred to above revealed typical amounts of 5% certified amounts in France, Greece and the Netherlands and 5% to 10% of the contract sum in Germany and Switzerland. </div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>== Rules on treatment of retention ==</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>==Rules on treatment of retention==</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The intention is that the retention money should, in effect, be set aside as a separate fund to be used only for the purpose of providing the employer with security against the making good of defects, and the purpose of making the employer a trustee is to protect the retention money against his liquidation<ref>A. Speaignt, G. Stone 2014, p.84</ref>. </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>The intention is that the retention money should, in effect, be set aside as a separate fund to be used only for the purpose of providing the employer with security against the making good of defects, and the purpose of making the employer a trustee is to protect the retention money against his liquidation<ref>A. Speaignt, G. Stone 2014, p.84</ref>. </div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
<tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>== Release of retention in construction contract ==</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">The rules and regulations regarding the treatment of retention money can vary depending on the country and the industry. In general, retention money must be held in a separate account, and the employer or client is responsible for ensuring that the funds are used appropriately.</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">In construction industry, some countries have laws that require employers or clients to pay interest on retention money held, to ensure that the contractor or supplier is not unduly penalized for the employer's or client's delay in releasing the funds.</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">In some countries, the retention money can only be released once the contractor or supplier has provided a bond, letter of credit, or other form of security to guarantee that they will complete the work as required.</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">The rules also specify the time frame for the release of retention money, for example, in the United Kingdom the retention money must be released by the employer or client no later than the final date for payment under the contract, unless there are legitimate grounds for withholding it.</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">It is important to note that the rules and regulations regarding the treatment of retention money may also be included in the contract between the employer or client and the contractor or supplier, so it's important to review the contract before starting a project.</ins></div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr>
<tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>==Release of retention in construction contract==</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Release of retention is another important item or milestone in any construction contract which is also an indication of completion of the scope of the project up to the mentioned stages. Usually, retention monies are released in 2 stages of the project. The first half of the retention monies [[needs]] to be certified and released at the time of issuing the Completion [[Certificate]]. If there is any outstanding work for the project, those will be stated in the Completion Certificate. A reasonable [[cost]] will be deducted from the retention money to cover the costs of completing the remaining work by a 3rd party if the contractor doesn't accept to complete the rejected work or any outstanding work. The second half of retention monies will be certified and released upon the expiry of defects liability period. In most construction contracts, the defects liability period is 12 months which the contractor is liable to complete any defects arise due to the poor workmanship. Upon issuance of Maintenance Certificate, the 2nd half of retention money will be released<ref>R. Pettigrew 2005, p.32</ref>.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Release of retention is another important item or milestone in any construction contract which is also an indication of completion of the scope of the project up to the mentioned stages. Usually, retention monies are released in 2 stages of the project. The first half of the retention monies [[needs]] to be certified and released at the time of issuing the Completion [[Certificate]]. If there is any outstanding work for the project, those will be stated in the Completion Certificate. A reasonable [[cost]] will be deducted from the retention money to cover the costs of completing the remaining work by a 3rd party if the contractor doesn't accept to complete the rejected work or any outstanding work. The second half of retention monies will be certified and released upon the expiry of defects liability period. In most construction contracts, the defects liability period is 12 months which the contractor is liable to complete any defects arise due to the poor workmanship. Upon issuance of Maintenance Certificate, the 2nd half of retention money will be released<ref>R. Pettigrew 2005, p.32</ref>.</div></td></tr>
<tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br/></td></tr>
</table>Swhttps://ceopedia.org/index.php?title=Retention_money&diff=60093&oldid=prevCeopediabot: typos fixed: doesn’t → doesn't (2), it’s → it's2019-12-13T21:38:39Z<p>typos fixed: doesn’t → doesn't (2), it’s → it's</p>
<p><b>New page</b></p><div>{{infobox4<br />
|list1=<br />
<ul><br />
<li>[[Certificate of satisfaction]]</li><br />
<li>[[Provisional sum]]</li><br />
<li>[[Indemnity bond]]</li><br />
<li>[[Advance payment bond]]</li><br />
<li>[[Certificate of substantial completion]]</li><br />
<li>[[Substantial completion]]</li><br />
<li>[[Reliance letter]]</li><br />
<li>[[Bidding documents]]</li><br />
<li>[[Termination for convenience]]</li><br />
</ul><br />
}}<br />
<br />
<br />
<br />
'''Retention [[money]]''' is described as the sum of money held by the employer as a safeguard for any defective or non-conforming [[work]] by the contractor. Retention money safeguards the employer by defects which can occur during the defects liability period if the contractor doesn't response according to the contract terms<ref>G. Hök, A. Jaeger 2009, p.166</ref>.<br />
<br />
== Purpose of retention money ==<br />
The '''purpose''' of retention money is, in significant part, to provide security, in the form of a source of funds, against the contractor's failure to complete any work outstanding when the works are taken over and to remedy any defects or damage and in respect of any other liability of the contractor to the employer. In general, retention money provides protection to the employer. Retention money gives the idea of importance of completing the signed [[project]] as per it's terms and designs. With such retention held, the contractor takes the responsibility to complete the construction project as per the design and [[quality]] stated in the initial contract<ref>E. Baker, B. Mellors 2013, p.393</ref>.<br />
<br />
== Amount and limit of retention money ==<br />
Amount and limit of retention money<ref>E. Baker, B. Mellors 2013, p.393</ref>:<br />
# The percentage to be applied to the contract value of the works executed to calculate the amount to be retained is the percentage of retention stated in the relevant contract document. The FIDIC forms also provide for the possibility of a limit of the retention money to be specified in the relevant contract document. <br />
# If no limit is specified, the amount that the employer will be entitled to retain will simply be the percentage of the total contract value of the works. The ESCL research referred to above revealed typical amounts of 5% certified amounts in France, Greece and the Netherlands and 5% to 10% of the contract sum in Germany and Switzerland. <br />
<br />
== Rules on treatment of retention ==<br />
The intention is that the retention money should, in effect, be set aside as a separate fund to be used only for the purpose of providing the employer with security against the making good of defects, and the purpose of making the employer a trustee is to protect the retention money against his liquidation<ref>A. Speaignt, G. Stone 2014, p.84</ref>. <br />
<br />
== Release of retention in construction contract ==<br />
Release of retention is another important item or milestone in any construction contract which is also an indication of completion of the scope of the project up to the mentioned stages. Usually, retention monies are released in 2 stages of the project. The first half of the retention monies [[needs]] to be certified and released at the time of issuing the Completion [[Certificate]]. If there is any outstanding work for the project, those will be stated in the Completion Certificate. A reasonable [[cost]] will be deducted from the retention money to cover the costs of completing the remaining work by a 3rd party if the contractor doesn't accept to complete the rejected work or any outstanding work. The second half of retention monies will be certified and released upon the expiry of defects liability period. In most construction contracts, the defects liability period is 12 months which the contractor is liable to complete any defects arise due to the poor workmanship. Upon issuance of Maintenance Certificate, the 2nd half of retention money will be released<ref>R. Pettigrew 2005, p.32</ref>.<br />
<br />
== Footnotes ==<br />
<references /><br />
<br />
== References ==<br />
* Baker E., Mellors B., (2013). ''[https://books.google.pl/books?id=FZY3AAAAQBAJ&dq=retention+money+PURPOSE&hl=pl&source=gbs_navlinks_s FIDIC Contracts: Law and Practice]'', CRC Press, London.<br />
* Hök G., Jaeger A., (2009). ''[https://books.google.pl/books?id=NmH_KZlOHdgC&dq=retention+money+definition&hl=pl&source=gbs_navlinks_s FIDIC - A Guide for Practitioners]'', Springer Science & Business Media, Berlin.<br />
* Pettigrew R., (2005). ''[https://books.google.pl/books?id=1P5e0wOyjTkC&dq=release+retention+money&hl=pl&source=gbs_navlinks_s Payment Under Construction Contracts Legislation]'', Thomas Telford, London.<br />
* Speaight A., Stone G., (2014). ''[https://books.google.pl/books?id=_RmoBQAAQBAJ&dq=retention+money+PURPOSE&hl=pl&source=gbs_navlinks_s Architect's Legal Handbook: The Law for Architects]'', Butterworth-Heinemann, London.<br />
{{a|Paulina Czarnota}}<br />
[[Category:Financial management]]</div>Ceopediabot