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Retainage · North Dakota

North Dakota retainage law: 10% cap until 50% complete (2026)

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

North Dakota allows retention of 10% of each estimate only until the project is 50% complete; later estimates carry no further retainage. N.D.C.C. § 43-07-23 sets this for private contracts and § 48-01.2-13 for public improvements, where retention may continue past 50% only if unsatisfactory progress or performance is documented. Neither section fixes a number of days for releasing what was held.

Private work

North Dakota · Private workVerified 2026-09-22
Retainage cap
10%
Applies to contracts between persons for work to be done by a contractor, except contracts subject to N.D.C.C. § 40-22-37 or § 48-01.2-13 (public improvements) or governed by federal retention rules.
Deadline
The 10% retention is allowable only until the project is 50% complete; after that no further retainage may be taken on estimates during the contract. The statute sets no release deadline for the amount already retained.
Statute
N.D.C.C. § 43-07-23.
What the statute says
Contracts entered between persons for the performance of work to be done by a contractor, except those contracts subject to section 40-22-37 or 48-01.2-13, or contracts governed by federal statutes or regulations which require other provisions with respect to retention, are subject to a maximum retention on amounts due under the contract as follows: retention of ten percent of each estimate presented is allowable until such time as the project is fifty percent complete ...
N.D.C.C. § 43-07-23. · Official text · retrieved 2026-09-22

Public work

North Dakota · Public workVerified 2026-09-22
Retainage cap
10%
Ten percent of each partial payment estimate until the project is 50% complete, then no further retainage unless unsatisfactory progress or performance is documented. At 95% completion the governing body may pay up to 95% of the amount retained from previous estimates.
Deadline
No fixed release deadline for retainage. Final payment of all moneys due follows completion of all work, acceptance of the project by the governing body, and provision of necessary releases; the remaining retained amount is paid in the amounts and at the times approved by the architect or engineer.
Statute
N.D.C.C. § 48-01.2-13.
What the statute says
A partial payment estimate must include retentions or retainage as follows: ten percent of each estimate until the project is fifty percent completed with no further retainage on estimates during the continuance of the contract unless unsatisfactory progress or performance is documented.
N.D.C.C. § 48-01.2-13. · Official text · retrieved 2026-09-22

Who this applies to

North Dakota puts the same retainage ceiling in two chapters of its Century Code: one for work between private parties, one for public improvements.

What the rule says

Retention in North Dakota stops at the halfway point instead of running to the end of the job. Each estimate may carry retainage of 10% up to the point the project reaches 50% completion [2], and estimates after that carry none for the rest of the contract [2]. Public improvements use the same 10% and 50% figures [1], with one opening: retention can go on past the halfway point where unsatisfactory progress or performance is documented [1]. Neither section sets a day count for paying out what has already been held [2] [1].

How to comply

  1. Hold the retention clause to the statute. On a private job, a clause that keeps more than 10% of an estimate, or keeps taking retainage once the project is 50% complete, goes past the maximum in § 43-07-23 [2]. On a public improvement, retention after the 50% mark needs documented unsatisfactory progress or performance [1].
  2. Find the payout date in the contract on private work. Section 43-07-23 names no deadline for releasing retained amounts [2]. One money rule does apply at the end: if the owner, governing board or authorized committee invested the retained funds, the interest they earned is payable to the contractor at final payment [2].
  3. Follow the public close-out sequence. Once 95% of the contract is complete, the governing body may pay the contractor up to 95% of the amount retained from earlier estimates [1]. The rest is paid in the amounts and at the times the architect or engineer approves [1], and final payment of all money due follows completion of all work, the governing body's acceptance of the project and provision of the necessary releases [1].
  4. Track the 30-day interest trigger on public work. Under § 48-01.2-14, a governing body that goes more than 30 days, counted from approval or from the completion and acceptance date, without considering a properly submitted estimate, paying an approved estimate or making final payment owes interest from the date of approval [1]. The rate is two percentage points below the Bank of North Dakota prime rate [1].

The full text of both sections is linked in the Sources list below; read it next to your own contract before you bill or release retainage.

Related

Run the numbers for North Dakota

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. N.D.C.C. ch. 48-01.2, Public Improvement Bids and Contracts (North Dakota Legislative Branch official Century Code PDF) (retrieved 2026-09-22)
  2. N.D.C.C. ch. 43-07, Contractors (North Dakota Legislative Branch official Century Code PDF), § 43-07-23 (retrieved 2026-09-22)

Changelog

  1. : 1 more jurisdiction verified and published, 47 of 51 in all.
  2. : 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.
  3. : 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.
  4. : 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.
  5. : 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.
  6. : 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.
  7. : 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.
  8. : 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).
  9. : 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.
  10. : 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.
  11. : 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.
  12. : 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.
  13. : 10 more jurisdictions verified and published, 46 of 51 in all.
  14. : Page published.
  15. : Dataset first published with 36 of 51 jurisdictions verified.