Colorado's Updated Retainage Law: What You Need To Know May Lead to Contract Review
Have you had a contract review 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:
A contract between a property owner and contractor where the contract price is at least $150,000.00; or
A subcontractor or supply agreement to such a contract.
This act does not apply to a single contract that governs:
The building of a single-family dwelling;
The building of a multifamily dwelling with four or fewer units; or
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.
*This article is intended for informational purposes only and should not be construed as legal advice. Individuals involved should consult with legal professionals for specific guidance tailored to their circumstances.
Thank you for reading! Please contact Miller & Law, P.C. if you would like to have your contracts reviewed and updated for compliance.
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