Glossary

Retention

Retention is a percentage of each progress payment withheld by the principal or head contractor as security that the work will be completed and defects rectified. Typically half is released at practical completion and the remainder at the end of the defects liability period.

CONSTRUCTION DEFECT GLOSSARY·UPDATED OCTOBER 2026

Where the word is used

Australian and British usage; in the United States the same money is retainage. Percentages and caps are set by the contract and, in some places, by security-of-payment legislation.

On site

Retention is why the defects liability period has teeth. The final release depends on a certifier being satisfied that notified defects were fixed, and the argument at that meeting turns on the record: what was notified, when, what was done, who checked it.

On the record

How IssuesId holds it

IssuesId does not hold or calculate retention. What it holds is the register the release conversation is about: every notified defect with its date, its trade, its rectification photo, who verified it and when, and the reports that print it filtered to the DLP window.

Asked alongside

Two questions people ask

What is retention in construction?

A percentage of each progress payment held back as security that the work will be completed and defects fixed. Part is released at practical completion and the rest at the end of the defects liability period, once the certifier is satisfied.

When is retention released?

Usually in two halves: the first at practical completion and the second at the end of the defects liability period, after the final inspection and rectification of anything notified. The contract sets the split and any conditions, and some jurisdictions require retention to be held in trust.

Related terms

Definitions describe common usage and the usual shape of standard-form contracts. Your contract and your jurisdiction’s building law set the terms that apply to your job. The whole list is at the glossary.