Retainage Rules Every South Florida Subcontractor Should Know

If you’re a subcontractor working on a project in Broward, Palm Beach, or Miami-Dade County, you’ve probably run into retainage. It’s the portion of your payment that gets held back until the job, or a phase of it, is finished. It’s meant to give owners and general contractors some leverage to make sure work gets done right. But for subcontractors, retainage can also mean months of delayed cash flow on money you’ve already earned.

Understanding how retainage actually works under Florida law can help you avoid getting shortchanged, and can help you know when it’s time to push back.

Public Projects Have Real Limits

If you’re working on a public job, meaning a project for a government agency, Florida law puts caps on how much retainage can be withheld. Under Florida Statute 255.078, retainage on public construction contracts cannot exceed 5 percent of each progress payment once specific conditions are met, and prior law had allowed rates as high as 10 percent before certain completion thresholds. Contractors and public entities cannot simply pick a number out of thin air; the statute lays out what triggers a required reduction, and it requires written notice to subcontractors if a contractor wants to withhold more than the standard rate based on documented performance concerns.

That written notice requirement matters. If a general contractor is holding back more than they should without explaining why in writing, that’s worth raising, either informally or with the help of legal counsel.

Private Projects Are a Different Story

Here’s where subcontractors often get surprised. On private construction projects, Florida does not cap retainage by statute. There’s no automatic 5 percent or 10 percent ceiling. Instead, retainage on private jobs is governed entirely by what the contract says. This means the contract you sign at the start of a project is doing all the work of protecting you (or not protecting you) when it comes to how much gets held back and when it gets released.

Before you sign a subcontract on a private job, read the retainage clause carefully. Does it specify a percentage? Does it say when retainage gets released, at substantial completion, final completion, or some other milestone? Vague language here can leave you waiting far longer than you expected to get paid in full.

Release Timelines Matter Too

Even when retainage is properly withheld, it cannot be held forever. Florida’s construction lien law addresses timelines for releasing retainage once a project reaches completion, and delays beyond what the contract or statute allows can expose the withholding party to disputes over interest or damages. If retainage is being sat on well past completion with no clear justification, that is a red flag worth investigating.

Protecting Yourself as a Subcontractor

Subcontractors who understand these rules going in are in a much stronger position than those who find out the hard way. Review your contract’s retainage terms before you sign, keep detailed records of completed work and payment requests, and don’t assume verbal promises about “getting paid at the end” will hold up if there’s no clear contract language behind them.

If you’re a subcontractor dealing with withheld payments or unclear retainage terms, we can help you review your contract and pursue what you’re owed. Contact our Fort Lauderdale construction lawyers at Sweeney Law, P.A. by calling 954-440-3993.

Sources:

flsenate.gov/Laws/Statutes/2019/255.078
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0713/Sections/0713.245.html