Dictionary of Business Terms: retainage
retainage
in a construction contract, money earned by a contractor but not paid to the contractor until the completion of construction or some other agreed-upon date. The amount is held back as assurance for the quality of the work.
Dictionary of Real Estate Terms: retainage
retainage
in a construction contract, money earned by a contractor but not paid to the contractor until the completion of construction or some other agreed-upon date.
Example: The general contractor earns $5,000 upon pouring the foundation, plus $15,000 upon completion of the frame, plus $10,000 upon completion of the roof. Of each payment, 10% is held back by the developer as retainage. It is paid after a Certificate of Occupancy is issued.
