Retention not released: can I adjudicate to get it back?
Yes. Retention money not released on time is the most common final-account dispute, and the fix is the same as for any unpaid amount. Once the contract's release trigger has passed, practical completion for the first half and the end of the defects period for the balance in most subcontracts, retention that is due for release is money payable under the contract and can go into a payment claim like any other amount. The adjudicator checks three things: that the trigger has actually occurred, what the contract says must happen for release, and whether the builder has a proven set-off against it.
What the adjudicator checks
The trigger first. Most subcontracts release half the retention at practical completion of your works and the rest at the end of the defects liability period. Some tie both to practical completion or the defects period of the whole project under the head contract, which can be years after you left site. The adjudicator reads your clause and asks whether the event it names has happened, so attach the certificate, the handover email or whatever evidence marks the date.
The mechanism second. Clauses often add conditions: a written request from you, delivery of manuals and warranties, a signed release form. An adjudicator will hold you to a condition that is in the contract and ignore one that isn't. Send the request the day the trigger lands and keep the proof.
Set-off third. A builder holding retention past the trigger usually says it is holding it against defects. The same rules apply as for any deduction: the defect, the notice, the cost and the clause all have to be in the payment schedule and proved. A builder cannot keep your retention against a defect it has never notified.
Why the claim matters even if you never adjudicate
Putting the retention in a payment claim starts the builder's clock. It must schedule the claim within the period the Act allows for your state or become liable for the amount, and if it schedules it short it has to give reasons it will be held to. In New South Wales retention money on larger projects must be held in trust, which is one more reason a builder answers a retention claim carefully.
Most retention gets released without an application. The claim, the diary date and the written request are what get it released; adjudication is what happens when the builder decides to test whether you will follow through.
Know where your contract stands
Adjudicate Pro: what an adjudicator would likely award under your state's Act, and whether to apply.
Assess my payment dispute freeCommon questions
My retention is tied to the end of the head contract defects period. Can I claim it earlier?
Not under the contract as written; the adjudicator applies the trigger you signed. That clause is a negotiation point before signing, not an adjudication point after. If you are still at the quote stage, ask for release measured against your own works and your own defects period.
Can the builder hold all of the retention for one small defect?
Only what it can justify. The adjudicator looks at the cost of the defect the builder has notified and proved, deducts that, and the balance is payable. A builder holding a five-figure sum against a snag list is holding your money, not security.
What if the builder has gone into administration with my retention?
Unless the retention was held in a trust account that applies to your project, it was part of the builder's working capital and you are an unsecured creditor for it. Lodge a proof of debt with the administrator and read the guide on what to do when a builder goes into administration.
Terms in this guide
Keep reading
- How much retention is normal on an Australian subcontract? →
- The builder won't release my retention. What can I do? →
- What is practical completion, and why does the date matter so much? →
- What does the defects liability period actually oblige me to do? →
- What is a deed of release, and should I sign one to get paid? →
General information for Australian subcontractors, not legal advice. Statutory deadlines and details vary by state and change over time; verify them before relying on them. Written by Mat Kennedy at The Construction Contracts Co.