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Colorado's Updated Retainage Law: What You Need To Know

Hey Contractors! Have you had your contracts reviewed recently? In September 2021, a new law went into effect that limits retainage on private construction contracts to 5%. C.R.S. §38-46-101, et. seq. Previously, it was a fairly standard practice for contractors and subcontractors to withhold 10% of the price of completed work as retainage.


The retainage statute applies to:

  1. A contract between a property owner and contractor where the contract price is at least $150,000.00; or

  2. A subcontractor or supply agreement to such a contract.

This act does not apply to a single contract that governs:

  1. The building of a single-family dwelling;

  2. The building of a multifamily dwelling with four or fewer units; or

  3. A contract with a public entity.


One important note is that this new legislation does not alter the requirement for a contractor, subcontractor, or supplier to execute lien waivers as a condition precedent for payment when such a condition is part of the contract. Please contact Miller & Law, P.C. if you would like to have your contracts reviewed and updated for compliance.

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