Business FinancesQuestion 1150 of 1605
On most California public works projects, retention withheld by the public entity is generally limited to a maximum of:
a.5%
b.15%
c.20%
d.10%
Explanation
Public Contract Code §7201 generally caps retention on public works at 5% absent a finding that the project is substantially complex. This limit helps contractors' cash flow. Private contracts commonly use 10% but are set by agreement.
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Related questions on this topic
- A contractor's bond is a form of surety bond. This means:
- An owner withholds 10% retention on a $40,000 progress billing. How much does the contractor receive on that billing?
- The primary purpose of retention (retainage) on a construction contract is to:
- A contractor completes a $250,000 job on which the owner withheld 10% retention throughout. Assuming no deductions, how much retention should be released at closeout?
- Progress billing (progress payments) means the contractor:
- On a home improvement contract, the down payment a contractor may collect is limited by law to whichever is less:
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)