Retention does not fall due on a date. It falls due on events, each of which has to happen before the next becomes possible, and the chain stalls quietly whenever one of them is not completed. Establishing where a particular project has stopped is the first step in a retention recovery assessment.
The events differ by contract, so what follows describes the usual shape rather than the position on any particular project. Your own contract remains the only reliable source for the dates and the triggers.
The events in order
Practical completion, which normally releases part of the retention, commonly half of it, and starts the defects period running.
The defects period itself, during which items notified are put right.
The certificate of making good, issued once the defects have been dealt with to the satisfaction of whoever the contract names.
And release of the balance, which usually follows that certificate within a stated period or with the final certificate.
Practical completion as the anchor
Everything after it depends on it, which makes the date of practical completion the single most important fact in a retention position.
Where it was certified, the date is established and the sequence runs. Where it was not, the chain has no starting point and the retention position is uncertain.
Disputes about whether completion occurred are therefore retention disputes as much as they are anything else.
The defects period
A defined period during which the contractor is required to make good defects notified to it, and at the end of which a schedule of outstanding items is usually issued.
It is a period rather than an open ended obligation. That distinction matters, because a list kept open indefinitely is frequently the reason retention is still held.
What the contract requires at the end of the period is worth reading, since forms differ on who issues what and when.
The certificate of making good
The document that records that the defects have been dealt with, and in most forms the trigger for the balance of retention.
It is also the document most frequently never issued, because the defects schedule was never formally closed and nobody chased it.
A contractor waiting for retention and an employer with an open list are usually looking at the same stalled step from opposite sides.
Where the chain breaks in practice
Practical completion taken informally, with the building occupied and nothing certified.
A defects list that grows rather than closes, with new items added long after the period expired.
A certificate of making good that nobody requests and nobody issues.
And a final certificate that cannot be issued because the step before it never happened.
Restarting it
Establish which event has not occurred and what the contract requires for it to occur. That is usually a short exercise with a clear answer.
Then address that step specifically rather than writing about the retention balance, which is the symptom rather than the cause.
Where the step is the defects certificate, closing out the schedule is the commercial priority even where individual items are disputed.
Partial possession and sections
Where the employer took possession of part, or where the works completed in sections, the sequence runs separately for each.
That means part of the retention may have fallen due long ago while the rest remains properly held.
Treating the retention as a single balance in those circumstances understates what is actually recoverable now, sometimes substantially.
What to establish first
The retention percentage and whether it reduces at completion. The date of practical completion. The length of the defects period. And the state of the defects schedule.
Those four facts determine the position, and all four come from documents rather than from anybody’s recollection.
Where any of them is uncertain, that uncertainty is the thing to resolve rather than the balance itself.
From the employer side
Holding retention beyond the point at which it fell due is a liability rather than a protection, and it damages a relationship for no commercial gain.
Where there are genuine outstanding defects, the answer is to deal with them formally rather than to hold the money and say nothing.
An employer who closes the sequence properly has a complete project and a contractor willing to come back; one who does not has an open liability and an argument.
The balance nobody can state
On schemes that ran for years, neither party can usually say what the retention balance actually is without going back through the certificates.
Establishing the figure is therefore frequently the first useful output, and it occasionally resolves the matter on its own.
It is also the step that makes any subsequent conversation possible, since neither side can settle a figure nobody has established.
What the contract says about release
Some forms release retention automatically on the stated events; others require a certificate or a statement before anything moves.
That difference decides whether a contractor is waiting for a date or for a document, and the two call for quite different action.
Reading the provision rather than assuming the usual position is worth the few minutes it takes, and it determines what you ask for.
Where it fits
Retention recovery is a narrow exercise and deliberately so. Where retention is the only money in question, it is far cheaper than reviewing a whole account.
Where it forms part of a wider disagreement about the account, it is addressed alongside everything else in a final account dispute review.
Running the completion and defects sequence properly in the first place belongs with contract administration rather than with claims work.
Retention that has not come back?
A retention recovery assessment establishes the balance from the certificates, fixes the release dates from the contract and sets out what has to happen before the money falls due.