By Sami Chicha, EditorUpdated Checked against primary sources · not yet reviewed by a licensed professionalFact-checked
Quick answer
Maryland caps retainage at 5% when the contractor has furnished 100% performance and 100% payment security. Private work (Real Property § 9-304, contracts of $100,000 or more): the owner pays undisputed retention within 90 days after substantial completion as the contract defines it. Public work (State Finance and Procurement § 17-110): the public body releases it within 120 days after satisfactory completion.
Private work
Maryland · Private workVerified 2026-09-22
Retainage cap
5%
The 5% ceiling applies where the contractor has furnished 100% performance security and 100% payment security; it caps both the retention across the contract and the retention from any single payment. The section does not apply to a contract under $100,000 or to a project funded wholly or partly by or through the Department of Housing and Community Development. Amounts beyond retainage may still be withheld for reasonable grounds relating to performance.
Deadline
90 days
Undisputed retention proceeds retained by an owner must be paid within 90 days after the date of substantial completion, as substantial completion is defined by the applicable contract or subcontract.
If a contractor has furnished 100% security to guarantee the performance of a contract and 100% security to guarantee payment for labor and materials, including leased equipment: (i) The retention proceeds under the terms of a contract may not exceed 5% of the contract price; and (ii) The retention proceeds of any payment due under the terms of a contract from an owner to a contractor may not exceed 5% of the payment.
Md. Code, Real Property § 9-304 (Retention proceeds). · Official text · retrieved 2026-09-22
Public work
Maryland · Public workVerified 2026-09-22
Retainage cap
5%
Where the contractor has furnished 100% payment security and 100% performance security, 'the percentage specified in the contract for retainage may not exceed 5% of the total amount of the contract'. Public bodies may still withhold additional amounts reasonably believed necessary to protect the public body's interest. State procurement units and the Maryland Transportation Authority are governed by the parallel § 13-225, which also permits retainage to be placed in an interest-bearing escrow under § 15-108 with interest paid pro rata.
Deadline
120 days
Within 120 days after satisfactory completion of a contract for construction the public body must release any retainage due; if there is a dispute or contract claim about satisfactory completion, within 120 days after the dispute or claim is resolved.
If a contractor has furnished 100% payment security and 100% performance security in accordance with this subtitle under a contract for construction awarded by a public body, the percentage specified in the contract for retainage may not exceed 5% of the total amount of the contract.
Md. Code, State Finance & Procurement § 17-110. · Official text · retrieved 2026-09-22
Who this applies to
Maryland ties its retainage ceiling to bonding, and it writes separate sections for private and public work.
Private construction
Real Property § 9-304 sets the private rule [1]. It does not apply to a contract under $100,000, or to a project funded wholly or partly by or through the Department of Housing and Community Development [1]. Its 5% limit applies where the contractor has furnished 100% performance security and 100% payment security [1].
Public construction
State Finance and Procurement § 17-110 covers construction contracts awarded by a public body, with the same bonding condition: 100% payment security and 100% performance security [4]. State procurement units and the Maryland Transportation Authority work under a parallel section, § 13-225 [5].
What the rule says
On a private job the ceiling operates twice over. Retention across the whole contract may not exceed 5% of the contract price, and retention from any single payment the owner makes to the contractor may not exceed 5% of that payment [1]. On a public job the test is the percentage the contract itself sets for retainage, which is capped at 5% of the contract's total amount [4]. Neither cap ends an owner's other rights to hold money: a private owner may still withhold amounts beyond retainage for reasonable grounds relating to performance [1], and a public body may still withhold additional amounts it reasonably believes necessary to protect its interest [4].
How to comply
Start with the bonding and, on a private job, the contract price, since the 5% ceiling is written for fully bonded contractors [1]. Then track who owes whom:
Private owner to contractor, 90 days. Undisputed retention held by an owner must be paid within 90 days after substantial completion [1]. Substantial completion here means whatever the applicable contract or subcontract defines it to be, so that definition decides when the clock starts [1].
Prime to subcontractor, private work. A prime contractor may not retain a higher percentage from a subcontractor than the owner retains from the prime [1].
Public body to contractor, 120 days. Any retainage due is released within 120 days after satisfactory completion of the construction contract; where a dispute or contract claim arises over whether completion was satisfactory, the 120 days run from the date it is resolved [4].
State procurement units. Section 13-225 allows retainage to be placed in an interest-bearing escrow under § 15-108, with the interest paid pro rata [5].
When private retention goes unpaid, there is no fixed statutory interest rate. Under Real Property § 9-303 a court may grant equitable relief for prompt payment of undisputed amounts, a term that expressly includes retention proceeds above the authorized amount, and may award interest from the date the amount was due plus reasonable costs [2]. A finding of bad faith opens the door to reasonable attorney's fees as well [2].
Read the sections listed in the Sources below alongside your contract's retainage and completion clauses before relying on this summary.
Related
Retainage calculator: the amount held back and the payment due on a pay application.
: 1 more jurisdiction verified and published, 47 of 51 in all.
: 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.
: 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.
: 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.
: 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.
: 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.
: 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.
: 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).
: 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.
: 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.
: 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.
: 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.
: 10 more jurisdictions verified and published, 46 of 51 in all.
: Page published.
: Dataset first published with 36 of 51 jurisdictions verified.
