Who this applies to
Nevada keeps its private and public retainage rules in different chapters of the Nevada Revised Statutes.
Private work. NRS chapter 624 governs agreements between an owner and a prime contractor for a work of improvement, and "owner" there means the owner or lessee of the real property [1]. Retention on these jobs rests on the agreement: the owner may withhold a retention amount if the agreement authorizes it [1]. Payment of lower-tiered subcontractors is the subject of NRS 624.624 [1], which this page does not cover.
Public works. NRS chapter 338 governs progress payments on public works, where the public body holds the retainage [2]. Those rules reach subcontractors as well, with NRS 338.555 dealing with payments to them [2].
What the rule says
Both sides start from 5% [1] [2], but only the public side changes as the work advances. A private owner's retention is limited to 5% of each payment to the prime contractor, for the whole job [1]. A public body withholds 5% of each progress payment until 50% of the work required by the contract has been performed [2]. After that it may stop withholding. If it keeps withholding, it may take no more than 2.5% of any progress payment, after first paying the contractor 50% of the retainage already held [2]. The exception is a public body that is also withholding for noncompliance under NRS 338.525, which may keep up to 5% [2]. On both sides the unpaid balance, retainage included, must be paid within 30 days after occupancy or use of the work, or after one of the other events each chapter lists [1] [2].
How to comply
- Compare the clause with the stage of the job. On private work the ceiling is 5% of each payment from start to finish [1]; on a public job the figure that applies depends on whether 50% of the work has been performed [2].
- Date the 30 days from the right event. On a private job, except as NRS 624.620 otherwise provides, money remaining unpaid for the construction is payable to the prime contractor within 30 days after the owner, or a person acting with the owner's authority, occupies or uses the work, or after the work becomes available for its intended use, with a written notice of availability or a certificate of occupancy [1]. On a public job, the public body pays any outstanding payment, including retainage and the interest accrued on it, within 30 days after the first of three events: occupancy or the beginning of use of the public work or a portion of it, recording of a notice of completion under NRS 108.228, or partial occupancy of one or more buildings [2].
- Know what late or held money earns. Money payable under the private sections accrues interest from the time it becomes due, at whichever is higher: the contract rate, or the prime rate at the largest bank in Nevada plus 4 percent (NRS 624.630) [1]. Public retainage earns interest while it is held: at the end of each quarter, the public body pays interest on any amount withheld at the highest 90-day certificate-of-deposit rate quoted by at least three insured Nevada institutions on the first day of that quarter [2]. NRS 338.530 adds interest on amounts withheld improperly [2].
Both chapters are linked under Sources; the agreement itself settles whether a private owner may withhold retention in the first place.
What changed recently
NRS 624.609, the private retention cap, was added in 2001 (p. 1619) and amended in 2005 (p. 1722) and 2015 (p. 2623) [1]. The public release section, NRS 338.520, was added to NRS in 1999 (p. 1984) [2].
Related
- Retainage calculator, which can split a job at a completion threshold and apply a lower rate past it.
- Retainage laws by state, for comparison with the rest of the country.