Is retention legally protected?

Not by default — held on builder's accounts. For projects over £500,000 consider a retention bond or third-party retention account for legal protection.

Can I skip retention?

On small jobs (<£25,000) — yes, defects-liability period alone is usually enough. On £50,000+ projects retention is standard and recommended.

What if builder refuses retention?

Strong red flag — most reputable London builders are comfortable with JCT retention. Refusal suggests cashflow problems or unwillingness to be accountable.

Does Builderr accept retention?

Yes — JCT MW standard 5% retention, released in two halves at PC and DLP end as contracted.

Quick Answer

What Is a Retention Clause in a London Construction Contract?

Q: Can I skip retention?

On small jobs (<£25,000) — yes, defects-liability period alone is usually enough. On £50,000+ projects retention is standard and recommended.

Q: What if builder refuses retention?

Strong red flag — most reputable London builders are comfortable with JCT retention. Refusal suggests cashflow problems or unwillingness to be accountable.

Q: Does Builderr accept retention?

Yes — JCT MW standard 5% retention, released in two halves at PC and DLP end as contracted.

A retention clause holds back 3–5% of each interim payment as insurance against defects. Half is released at practical completion (PC) when major snags are resolved; the other half at the end of the defects-liability period (DLP — typically 6–12 months) when minor snags are resolved. On a £200,000 project at 5% retention: £10,000 total held; £5,000 released at PC, £5,000 at DLP end. JCT contracts include retention as standard.

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How retention works

Each interim valuation: gross value × 95% = payable now, 5% accumulates in a retention account (often a holding sub-account on builder's accounts, not legally ring-fenced but conventionally honoured). Builder issues invoices at 95% of work value. Client pays as invoiced. Accumulated retention sits across the project life.

Release schedule

50% of retention released at practical completion (PC) — when the building is substantially complete and habitable, all major snags resolved, building control completion certificate issued, gas/electric certs delivered. 50% released at end of defects-liability period (DLP) — typically 6 months for JCT MW, 12 months custom — after a return inspection where final snags signed off.

When retention matters most

Heritage projects with longer drying times (lime plaster, traditional finishes). Large extensions with structural settlement risk. Projects where finish quality is contested. New build / Section 106 / mortgage-required programmes. Retention is your protection if builder goes silent post-handover — you have leverage.

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