Station Road, Sidcup

How can we help?

Please fill in this form and we'll get back to you as soon as possible.

Please enter your name
Please enter your email address
Please enter your telephone number
Please enter a question
Please let us know how you heard about us
Please enter the verification code

We’ll only use this information to handle your enquiry and we won’t share it with any third parties. For more details see our Privacy Policy

Retentions Consultation - Changes Ahead for the Construction Industry?

The review of how retention arrangements work in the construction industry, recently announced by the Department for Business, Innovation and Skills, will be welcomed by all parties to such agreements.

Retentions are often a problematic issue in building contracts, although their use is widespread. In particular, the retention for what can be a considerable period of time of a significant proportion of the total profit on a contract can cause serious cash flow issues for contractors and their subcontractors, who also normally face retentions.

In addition, there is a widespread feeling that the use of retentions imposes an unnecessary administrative burden on all those involved. A retention may act as a practical guarantee of the quality of work done, but its payment is often in practice under the total control of the contractor's employer and may be unnecessarily delayed, or even be at risk if the employer faces cash flow problems.

Suggestions for change include the use of a 'bond' system, or the use of payment into trust.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.