Retention in a Self-Build in Ireland — 5% Held Back, When It's Released, and the Trap
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5% retention is held back from each stage payment. Released at snag closure: half at handover, half 6 months later. The retention is your leverage against defects. Don't release it until the snag list is closed or in writing agreed. Most RIAI contracts have a 12-month defects liability period. The retention is held for the first 6 months, then released. Some contracts hold 2.5% for 12 months and 2.5% for 24 months (longer retention for latent defects). Get this agreed in the contract, not at the end of the build. The retention is the most important number in the contract.
TL;DR
5% retention is held back from each stage payment. Released at snag closure: half at handover, half 6 months later.
The retention is your leverage against defects. Don't release it until the snag list is closed or in writing agreed.
Most RIAI contracts have a 12-month defects liability period. The retention is held for the first 6 months, then released.
When this matters most
You're at the contract stage and need to agree retention.
When this doesn't apply
The retention is released.
Frequently asked questions
What is retention in a building contract?
5% of each stage payment is held back. Released at snag closure: half at handover, half 6 months later. Your leverage against defects and unfinished work.
When is retention released?
At snag closure. Half at handover, half 6 months later. Some contracts hold 2.5% for 12 months and 2.5% for 24 months. Get this agreed in the contract, not at the end.
What is the defects liability period?
12 months from practical completion, during which the contractor must fix defects that appear. Most RIAI contracts have this. The retention is held during the first 6 months.
Sources
RIAI, Form of Building Contract 2012. https://www.riai.ie/
Frequently asked questions
What is retention in a building contract?
5% of each stage payment is held back. Released at snag closure: half at handover, half 6 months later. Your leverage against defects and unfinished work.
When is retention released?
At snag closure. Half at handover, half 6 months later. Some contracts hold 2.5% for 12 months and 2.5% for 24 months. Get this agreed in the contract, not at the end.
What is the defects liability period?
12 months from practical completion, during which the contractor must fix defects that appear. Most RIAI contracts have this. The retention is held during the first 6 months.