Rhode Island retainage law: 5% cap, public and private (2026)
By Sami 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, or for state or municipal public works, may include retainage above 5% of any progress payment. A contract for construction (§ 5-65-1) is a lienable private job or public project of $250,000 or more, excluding homes of 1 to 4 units. A retainage application may follow 60 days after substantial completion and is paid within 30 days.
Private work
Rhode Island · Private workVerified 2026-09-22
Retainage cap
5%
R.I. Gen. Laws § 37-12-10.1(a) bars any contract for construction, as defined in § 5-65-1, from including retainage that exceeds five percent (5%) of any progress payment. A 'contract for construction' (§ 5-65-1(6)) is a contract for which a mechanics' lien may be established under chapter 28 of title 34, or for state or municipal public works, on a project whose original contract with the owner is at least $250,000; it does not include a project containing one to four dwelling units. So a private, lienable job of $250,000 or more is covered, and private homes of one to four units are not. 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.
Deadline
30 days
Not earlier than 60 days after substantial completion (or the final resolution of a dispute), unless the contract provides for an earlier submission, a person may submit a written application for payment of retainage, which is paid within 30 days of submission; each tier below the owner may take 7 days longer than the tier above (§ 37-12-10.1(e)). Before that, the prime contractor gives notice of substantial completion within 14 days of reaching it, and the owner has 14 days to accept or reject (§ 37-12-10.1(b)-(c)).
(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.
R.I. Gen. Laws § 37-12-10.1(a) bars any contract for construction, as defined in § 5-65-1, 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. A 'contract for construction' (§ 5-65-1(6)) is a contract for which a mechanics' lien may be established under chapter 28 of title 34, or for state or municipal public works, on a project whose original contract with the owner is at least $250,000; it does not include a project containing one to four dwelling units. 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 Rhode Island Department of Transportation is exempt from § 37-12-10.1 and may deduct up to 5% of the contract price (§ 37-12-10.1(m)). 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
Not earlier than 60 days after substantial completion (or the final resolution of a dispute), unless the contract provides for an earlier submission, a person may submit a written application for payment of retainage, which is paid within 30 days of submission; each tier below the owner may take 7 days longer than the tier above (§ 37-12-10.1(e)). Before that, the prime contractor gives notice of substantial completion within 14 days of reaching it, and the owner has 14 days to accept or reject (§ 37-12-10.1(b)-(c)).
(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].
A contract for construction is a contract for which a mechanics' lien may be established, or for state or municipal public works, on a project whose original contract with the owner is at least $250,000; a project containing one to four dwelling units is not one [2]. So the section reaches private, lienable jobs of that size as well as public works. The Rhode Island Department of Transportation is exempt from it, and may deduct up to 5% of the contract price instead [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.
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].
Wait out the 60 days. Unless the contract allows an earlier submission, an application for payment of retainage may be submitted only after 60 days have passed since substantial completion, or after a dispute over completion is finally resolved [1].
Submit the application for payment of retainage. Its submission starts the 30-day payment deadline [1], and each tier below the owner may take 7 days longer than the tier above [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 [2].
What changed recently
Section 37-12-10.1 was added by P.L. 2018, ch. 170, § 3 [1].
Related
Retainage calculator: works through a pay application at the retainage rate your contract sets.
: 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.
