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Retainage · Delaware

Delaware retainage law: 5% on large public jobs, no private cap (2026)

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

On large Delaware public works contracts the agency retains 5% of the value of completed work (29 Del. C. § 6962(d)(5)), may release 60% of it at completion, and must pay it within 60 days after completion or notice of completion unless it makes a written finding (§ 6516(f)(3)); interest runs from the 61st day. For private work, 6 Del. C. § 3506 sets no cap and leaves retainage to the contract.

Private work

Delaware · Private workVerified 2026-09-22
Retainage cap
No statutory cap and no statutory release deadline. Delaware's Building Construction Payments chapter expressly preserves contractual retainage: 6 Del. C. § 3506(a)(3) says the required payment clause 'shall not be construed to impair the right of the owner to include in its contracts provisions which permit the owner to retain a specified percentage of each progress payment otherwise due to a contractor for satisfactory performance under the contract without incurring any obligation to incur an interest penalty, in accordance with the terms and conditions agreed to by the parties'; § 3506(d) says the same for contractor-to-subcontractor retainage and § 3507(c) repeats it. Where payment is withheld, written notice of the reason must be given within 7 days of the date payment was required.
Deadline
Not regulated for retainage specifically. The chapter's general deadlines are: owner pays the contractor within 30 days of the end of the billing period (§ 3506(a)(1)); if the contract is silent, the owner pays all undisputed amounts within 30 days after the end of the billing period or 30 days after delivery of the invoice, whichever is later (§ 3507(c)); and a general, prime or subcontractor pays undisputed amounts owed to its subcontractors and suppliers within 15 days after receiving each payment (§ 3507(d)).
Statute
6 Del. C. § 3506; § 3507.
What the statute says
The clause required by this subsection shall not be construed to impair the right of the owner to include in its contracts provisions which permit the owner to retain a specified percentage of each progress payment otherwise due to a contractor for satisfactory performance under the contract without incurring any obligation to incur an interest penalty, in accordance with the terms and conditions agreed to by the parties to the contract.
6 Del. C. § 3506; § 3507. · Official text · retrieved 2026-09-22

Public work

Delaware · Public workVerified 2026-09-22
Retainage cap
5%
29 Del. C. § 6962(d)(5)a.1 (large public works contracts): 'The percentage retained shall be 5% of the value of the work completed by the contractor under the contract.' The percentage must be stated in the bidding documents and incorporated into the contract. The agency may at its option retain only a small amount and pay out portions it deems equitable (§ 6962(d)(5)a.2), and may forfeit all or part of retainage if the contractor causes delay past the scheduled completion date (§ 6962(d)(5)a.3). A separate DelDOT rule at § 6962(c)(12)c.2.B lets a contractor below the minimum performance rating bid if it accepts variable retainage not exceeding 5%.
Deadline
60 days
On completion of the work under the contract the agency may release 60% of the amount then retained; the balance is held until all reports required by the contract are received, all subcontractors in trades listed on the bid form are paid (the agency may withhold 150% of a disputed amount), and final payment is authorized by the agency (§ 6962(d)(5)). Under 29 Del. C. § 6516(f)(3), the retainage is paid to the contractor within 60 days after completion or the filing of notice of completion of the contract, or within 30 days of a required federal agency's final approval or certification; holding it longer than 60 days after final completion and acceptance requires the agency's written finding, furnished within 10 days, and after 60 days the agency may keep no more than 150% of the expenses that finding identifies.
Statute
29 Del. C. § 6962(d)(5) (5% retainage); § 6516(f)(3)-(4) (60-day payment; interest).
What the statute says
Agencies may retain a portion of the payments to be made to a contractor for work performed pursuant to a public works contract. … The percentage retained shall be 5% of the value of the work completed by the contractor under the contract. Upon completion of the work under the contract, the agency may release 60% of the amount then retained.
29 Del. C. § 6962(d)(5) (5% retainage); § 6516(f)(3)-(4) (60-day payment; interest). · Official text · retrieved 2026-09-22

Who this applies to

On the public side, the rule is written for large public works contracts let by Delaware agencies under § 6962 of title 29 [2]. The percentage has to appear in the bidding documents and be incorporated into the contract [2]. DelDOT work adds one variation: a contractor rated below the minimum performance rating can still bid if it accepts variable retainage of no more than 5% [2].

On the private side, the Building Construction Payments chapter of title 6 [1] sets payment rules for owners, contractors and subcontractors but keeps its hands off retainage percentages. It preserves the owner's right to write a retained percentage of each progress payment into its contracts, and a contractor's right to do the same with its subcontractors [1].

What the rule says

Delaware names a public rate and leaves the private one open. On a large public works contract, the agency's retainage is 5% of the value of the work the contractor has completed [2], though the agency may choose to retain only a small amount instead and pay out portions it considers equitable [2]. For private work there is no statutory cap and no statutory release date for retainage; what the chapter adds is a frame of notice, interest and fee rules around any withheld payment.

How to comply

Public contracts

  1. Find the percentage in the bid documents and compare it with the 5% [2] the statute sets.
  2. Keep the schedule in view: a contractor that causes delay past the scheduled completion date can have all or part of its retainage forfeited [2].
  3. At completion, the agency may release 60% [2] of what it then holds.
  4. The balance waits for three things: every report the contract requires, payment of all subcontractors in trades listed on the bid form (the agency may withhold 150% [2] of a disputed amount), and the agency's authorization of final payment. Section 6962(d)(5) ties the balance to those conditions [2], and § 6516(f)(3) adds a deadline.
  5. Retainage is paid within 60 days after completion or the filing of notice of completion, or within 30 days of a required federal agency's final approval or certification [3]. To hold it longer than 60 days after final completion and acceptance, the agency must make a written finding of the reasons, furnished within 10 days, and after 60 days it may keep no more than 150% of the expenses that finding identifies [3].
  6. If final payment is delayed by more than 60 days after the final submission, the contractor may require interest from the sixty-first day, except on amounts the agency controverts on reasonable grounds in writing within those 60 days [3].
  7. Cash is not the only option. The contractor may substitute Treasury securities, Delaware bonds, certificates of deposit or a letter of credit for retained money [2].

On DelDOT's variable-retainage track, a contractor can ask at 50% [2] completion for the retainage to be reduced to 2% [2] after an interim evaluation; completion is measured by actual work completed, not counting money paid for stored materials.

Private contracts

The retained percentage and its release are whatever the contract says. Around that, the chapter sets these rules:

What changed recently

The private payment rules trace to chapter 420 of volume 70 of the Laws of Delaware, amended by chapter 134 of volume 71 and chapter 357 of volume 74 [1].

Related

Run the numbers for Delaware

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. Delaware Code Online, Title 6, Chapter 35, Building Construction Payments (§§ 3501-3509) (retrieved 2026-09-22)
  2. Delaware Code Online, Title 29, Chapter 69, Subchapter IV, Public Works Contracting (§ 6962) (retrieved 2026-09-22)
  3. 29 Del. C. ch. 65, § 6516 (payments; retainage under § 6962(d)(5)), Delaware Code Online (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.