Rhode Island retainage law: 5% public cap, 30-day payment (2026)
By Oussama Chicha, EditorUpdated Checked against primary sources · not yet reviewed by a licensed professionalFact-checked
Quick answer
Under R.I. Gen. Laws § 37-12-10.1, no contract for construction as defined in § 5-65-1, or for state or municipal public works projects, may include retainage above 5% of any progress payment; contracts under § 37-12-10 are excluded. An application for payment of retainage must be paid within 30 days of submission. This page covers the public-works side; for private work, the contract and a lawyer answer the rest.
Private work
Rhode Island · Private workVerified 2026-09-22
Retainage cap
Not in our verified record
Deadline
Not in our verified record
Statute
Not in our verified record
Public work
Rhode Island · Public workVerified 2026-09-22
Retainage cap
5%
R.I. Gen. Laws § 37-12-10.1(a) bars any contract for construction, or for state or municipal public works projects, from including retainage that exceeds five percent (5%) of any progress payment; contracts under § 37-12-10 are excluded. The owner has 14 days to give notice of substantial completion and 14 days to accept or reject, and withholding on release is limited to 150% of the cost to complete plus 2.5% of the adjusted contract price, with 0.5% holdable for up to one year. The companion § 37-12-10 lets an awarding authority retain not exceeding five percent (5%) of the contract price on public works, sewer and water-main contracts under $500,000.
Deadline
30 days
Submission of an application for payment of retainage, after the 14-day notice of substantial completion and the owner's 14 days to accept or reject.
(a) No contract for construction, as defined in Sec. 5-65-1, or for state or municipal public works projects, as defined in this title, excluding contracts under Sec. 37-12-10, shall include retainage that exceeds five percent (5%) of any progress payment.
Section 37-12-10.1 of the Rhode Island General Laws reaches two kinds of contract: contracts for construction as defined in § 5-65-1, and contracts for state or municipal public works projects [1]. Contracts under § 37-12-10 are excluded from it [1].
The section speaks to three stages of a job: the retainage a contract may carry, the steps around substantial completion, and payment of the retainage once an application is in. This page covers that rule as it applies to public work. It does not describe retainage on private jobs; for those, the contract and a lawyer familiar with Rhode Island law are the place to find the answer.
What the rule says
Subsection (a) sets the ceiling as a limit on the contract's own terms: no covered contract may include retainage above 5% of any progress payment [1]. Because the limit is stated per progress payment, each payment is measured on its own. Release runs through a separate application for payment of retainage, which carries a 30-day payment deadline from the date it is submitted [1], and the amount that can still be withheld at that stage is capped as well [1].
How to comply
Test each retainage figure against 5% of the progress payment it comes from[1]. A contract the section covers may not include a higher figure.
Work through the completion steps first. Before the application come a 14-day notice of substantial completion and a 14-day window for the owner to accept or reject [1].
Submit the application for payment of retainage. Its submission starts the 30-day payment deadline [1]. The two 14-day periods lead up to the application; the 30-day period begins only once it is in [1].
Know the limit on what stays behind. When retainage is released, withholding is limited to 150% of the cost to complete plus 2.5% of the adjusted contract price, and 0.5% may be held for up to one year [1].
The section is linked under Sources. Read it with the contract, and with § 5-65-1, which supplies the definition of a contract for construction [1].
Related
Retainage calculator: works through a pay application at the retainage rate your contract sets.
