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Retainage · Colorado

Colorado retainage law: 5% cap, 60-day public release (2026)

By Sami Chicha, EditorUpdated Checked against primary sources · not yet reviewed by a licensed professionalFact-checked
Quick answer

On Colorado private contracts of at least $150,000 and their subcontracts, except a single contract for one dwelling of up to four units, retainage may not exceed 5% of the price of completed work (C.R.S. § 38-46-103); the contract sets release timing. On public contracts over $150,000 the entity pays at least 95% of completed work and makes final settlement within 60 days of final acceptance (C.R.S. § 24-91-103).

Private work

Colorado · Private workVerified 2026-09-22
Retainage cap
5%
C.R.S. § 38-46-103(1) (added by HB21-1167): 'A property owner, contractor, or subcontractor shall not withhold as retainage more than five percent of the price of the work completed under the contract or subcontract.' Article 46 applies to a contract with a price of at least $150,000 between a property owner and a contractor, and to any subcontract or supply agreement under such a contract even if its own price is below $150,000 (§ 38-46-102(1)). It does not apply to a single contract governing the building of one single-family dwelling or one multifamily dwelling with no more than four family dwelling units, or to a contract with a public entity as defined in § 24-91-102(3) (§ 38-46-102(2)). HB26-1311 adds § 38-46-103(1)(b): in lieu of retainage, a subcontractor or contractor may tender a retainage bond of up to five percent of the money it has earned, and the property owner, contractor or subcontractor shall accept a compliant bond and release the retainage it covers; the bond option does not apply to a contract that concerns property owned by a public entity, including a public-private partnership. HB26-1311 applies to contracts created on or after its effective date.
Deadline
Not regulated. C.R.S. § 38-46-103(2) states that article 46 'addresses only the amount of retainage that may be withheld' and does not change, override or invalidate contract provisions on timing of payment (including final payment), satisfactory-performance requirements, backcharges, or pay-if-paid style conditions precedent.
Statute
C.R.S. § 38-46-103 (article 46 of title 38, §§ 38-46-101 to 38-46-104).
What the statute says
A property owner, contractor, or subcontractor shall not withhold as retainage more than five percent of the price of the work completed under the contract or subcontract. Making a partial payment under this subsection (1) is not acceptance or approval of some of the work or of a waiver of defects in the work.
C.R.S. § 38-46-103 (article 46 of title 38, §§ 38-46-101 to 38-46-104). · Archived copy of the official text, captured 2026-01-14

Public work

Colorado · Public workVerified 2026-09-22
Retainage cap
5%
C.R.S. § 24-91-103(1)(a): for a contract exceeding $150,000 for the construction, alteration or repair of any highway, public building, public work, public improvement, structure or system, the public entity 'shall pay at least ninety-five percent of the calculated value of completed work' in monthly partial payments, so long as the contractor is satisfactorily performing. Article 91 does not apply where federal or other funding-source retention requirements are inconsistent with it (§ 24-91-110).
Deadline
60 days
The withheld percentage may be retained until the contract is completed satisfactorily and finally accepted by the public entity; the public entity must then make final settlement in accordance with C.R.S. § 38-26-107 within 60 days after the contract is completed satisfactorily and finally accepted.
Statute
C.R.S. § 24-91-103.
What the statute says
The public entity shall pay at least ninety-five percent of the calculated value of completed work. The withheld percentage of the contract price of any contracted work, improvement, or construction may be retained until the contract is completed satisfactorily and finally accepted by the public entity.
C.R.S. § 24-91-103. · Archived copy of the official text, captured 2026-08-23

Who this applies to

Private construction. Article 46 of title 38 covers a contract of at least $150,000 [1] between a property owner and a contractor, plus every subcontract and supply agreement under it, even one priced below $150,000 [1]. The cap binds property owners, contractors and subcontractors alike [4]. Two kinds of contract fall outside: a single contract to build one single-family dwelling, or one multifamily dwelling of no more than four units [1], and a contract with a public entity.

Public construction. Article 91 of title 24 governs contracts over $150,000 [3] to build, alter or repair a highway, public building, public work, public improvement, structure or system. Where federal or other funding-source retention requirements are inconsistent with it, article 91 does not apply [3].

What the rule says

Colorado uses one ceiling for both markets but regulates the calendar on only one of them. On a covered private contract, nobody in the chain may hold back more than 5% [4] of the price of work completed, and making a partial payment is not acceptance of the work or a waiver of defects. On a public contract, the entity pays at least 95% [3] of the calculated value of completed work in monthly partial payments while the contractor performs satisfactorily, may keep the balance until the contract is completed satisfactorily and finally accepted, and then has 60 days [3] to make final settlement.

How to comply

For a private contract:

For a public contract:

What changed recently

The private cap is the newer rule. House Bill 21-1167, chapter 146 of the 2021 session laws, added article 46 effective September 7, 2021, for contracts made on or after that date [4]. Article 91 is older: added in L. 79 and amended in L. 91 and L. 2004, it was changed again by HB 11-1115, effective August 10, 2011, and HB 14-1387 amended subsection (1)(a) effective June 6, 2014 [3].

House Bill 26-1311 adds a retainage bond to the private rule. On contracts created on or after its effective date, August 12, 2026 for the 2026 session's May 13 adjournment, a contractor or subcontractor may tender a retainage bond of up to 5% of the money it has earned in lieu of retainage, and the owner, contractor or subcontractor holding the retainage must accept a bond that meets the act's requirements and release the retainage it covers [5]. The option does not apply to a contract concerning property owned by a public entity, including a public-private partnership [5]. The 5% cap itself is unchanged.

Related

Run the numbers for Colorado

How retainage is held on each payment and when it comes back: Retainage in construction. Bill it on the pay application template, which carries retainage on work and on stored materials.

Retainage laws: other states

Sources

  1. House Bill 21-1167, signed act (enacting C.R.S. article 46 of title 38), Colorado General Assembly (retrieved 2026-09-22)
  2. HB21-1167 bill page, Colorado General Assembly (retrieved 2026-09-22)
  3. Colorado Revised Statutes 2024, Title 24 (official OLLS publication), C.R.S. §§ 24-91-102 to 24-91-110 (archived copy, captured 2026-08-23)
  4. Colorado Revised Statutes 2024, Title 38 (official OLLS publication), C.R.S. § 38-46-103, Colorado General Assembly (archived copy, captured 2026-01-14)
  5. HB26-1311, Concerning the use of a bond in lieu of retainage in construction contracts, signed act, Colorado General Assembly (retrieved 2026-10-17)

Changelog

  1. : Page updated.
  2. : 1 more jurisdiction verified and published, 47 of 51 in all.
  3. : California private work corrected: Civ. Code § 8811 (SB 61) caps retention at 5% for contracts entered into on or after January 1, 2026; the row had said no cap.
  4. : Missouri private work corrected: Mo. Rev. Stat. §§ 436.300 to 436.336 cap private retainage at 10% and require release within 30 days of substantial completion; the row had said no private retainage rule.
  5. : Tennessee corrected: Tenn. Code Ann. § 66-34-203 caps owner-to-prime retainage at 5% of the contract, on public and private work; escrow applies to prime contracts of $500,000 or more, and the $300-a-day damages do not apply to public owners.
  6. : Idaho private work added: Idaho Code § 29-115 caps private retention at 5% and requires release within 35 days of final completion; the row had left private work out.
  7. : Rhode Island corrected: the 5% cap in R.I. Gen. Laws § 37-12-10.1 also covers private lienable work of $250,000 or more, and a retainage application may be submitted only 60 days after substantial completion unless the contract allows earlier.
  8. : Oklahoma public work corrected: since November 1, 2022, 61 O.S. §§ 113.1 and 226 reduce retainage to 2.5% of the amount earned to date after 50% completion with satisfactory progress, with no bond condition.
  9. : Montana public work corrected: state and local public contracts are capped at 5% under Mont. Code Ann. § 18-2-316, and final payment on building contracts is due within 30 days of final acceptance (§ 18-2-306).
  10. : Delaware public work corrected: 29 Del. C. § 6516(f)(3) requires retainage to be paid within 60 days after completion or notice of completion, with interest available from the 61st day; the row had no release deadline.
  11. : District of Columbia corrected: D.C. Code § 2-203.01 requires a 10% retent on District construction contracts until completion and acceptance, and the Private Contractor and Subcontractor Prompt Payment Act counts retainage as an undisputed amount due on its schedule; both rows had said no statute.
  12. : Colorado private work updated: HB26-1311 lets a contractor or subcontractor tender a retainage bond of up to 5% in lieu of retainage on contracts from August 12, 2026, and the owner must accept a compliant bond.
  13. : Kentucky private work updated: 2025 Ky. Acts ch. 156 raised the KRS 371.160 escrow threshold to $2,000,000 and barred waiving it by contract.
  14. : 10 more jurisdictions verified and published, 46 of 51 in all.
  15. : Page published.
  16. : Dataset first published with 36 of 51 jurisdictions verified.