16-1904.   Retainage; release and withholding thereof;failure to pay.(a) An owner, contractor or subcontractor maywithhold no more than 10% retainage from the amount of anyundisputed payment due.

      (b)   An owner must release the retainage on any undisputed payment due ona construction project within 30 days after substantial completion of theproject; however, if any subcontractor is still performing work on the projectunder its subcontract, an owner may withhold that portion of the retainageattributable to such subcontract until 30 days after such work is completed.

      (c)   If an owner, contractor or subcontractor fails to payretainage, if any, pursuant to the terms of a contract for publicconstruction or as required by this act, the owner, contractor orsubcontractor shall pay interest to the contractor orsubcontractor to whom payment was due, beginning on the first business dayafter the payment was due, at a rate of 18% perannum.

      (d)   Nothing in this section shall prevent early release of retainage if itisdetermined by the owner, the contractor and the project architect or engineer,that a subcontractor has completed performance satisfactorily and that thesubcontractor can be released prior to substantial completion of the entireproject without riskor additional cost to the owner or contractor. Once so determined, thecontractor shall request such adjustmentin retainage, if any, from the owner as necessary to enable the contractor topay the subcontractor in full, and the owner shall, as part of the nextcontractual payment cycle, release the subcontractor's retainage to thecontractor, who shall, as part of the next contractual payment cycle, releasesuch retainage as is due to the subcontractor.

      History:   L. 2007, ch. 163, § 4; July 1.