RICS describes retention as a contractual payment mechanism whose calculation and release need to be understood. [1] [2]
Agree the mechanism before work starts
Ask the contract adviser to identify the percentage or amount, the payments affected, any limit and the release conditions. Request a written explanation of how those terms apply to your project. Use your own agreed figures for the review instead of copying a deduction from another homeowner’s payment schedule.
For a practical review, ask for a worked payment example using your own contract figures. It should show the valuation, the retention deduction, earlier payments and the amount now due. Check that the same interpretation appears in the contractor's payment schedule.
Understand the release stages
Some JCT arrangements release part at practical completion and the balance after the defects process has been completed. The relevant contract controls the proportions, certificates and timing. A final visit, the end of a stated period and a certificate confirming defects have been made good are not necessarily the same event. [3] [4]
Keep a retention register and a list of outstanding requirements. Record the certificate or other evidence supporting each release. If a disputed defect remains, obtain advice on the correct response instead of simply keeping every remaining payment indefinitely. [5]
Ask what protection it actually provides
Retention does not repair the building by itself. Ask whether the retained amount is proportionate to the obligations it is intended to secure and how a disagreement will be resolved. Also ask who holds the money, whether separate holding arrangements exist and what happens if that party becomes insolvent. These are questions for the proposed terms, not assumptions that money is automatically held in a protected account. [1]
Continue inspections and record defects while work remains accessible. RICS distinguishes retention as security from the separate valuation of work and the procedures for requiring defects to be corrected. [5]
The proposed ban is not current law
As at 2 October 2026, the Commercial Payments Bill is still before Parliament. The version published on 15 September 2026 proposes a ban on construction retention clauses with transitional arrangements. It does not justify ignoring an existing contract today. [6] [7]
The proposals interact with the Construction Act regime, including questions about residential-occupier contracts. Do not assume that a headline about commercial construction applies identically to your own-home project. Re-check the final legislation, scope and commencement before relying on any future change. [7] [8]