When is Retention Released in JCT Subcontracts? Under standard JCT subcontracts, the first 50% of retention is released upon achieving Subcontract Practical Completion (PC). The remaining balance is released following the end of the Rectification Period (Defects Liability Period) and the issue of the Notice of Completion of Making Good.
Retention deductions (typically 3% to 5%) are supposed to act as a defect security deposit, not free working capital for the main contractor. Yet for independent trade contractors, getting that final retention payment often feels like chasing an impossible debt.
If you don’t understand how Practical Completion and the Rectification Period legally link together under standard Joint Contracts Tribunal rules, you risk leaving thousands of pounds trapped on finished jobs. Below, I break down the exact rules for retention release, the sneaky amendment traps main contractors use to hold your funds, and how to get your money back.
1. Technical Authority: How JCT Governs Practical Completion and Retention
Under standard JCT subcontract terms (SBCSub and DBSub Clauses 2.21, 2.25, and 4.18), retention release runs on a strict two-stage statutory timetable:
- First Release (50% at Subcontract PC – Clause 2.21): Triggered when your specific trade package is practically complete. The main contractor issues a statement of completion for your works and must include 50% of your withheld retention in the next interim valuation.
- Defects Rectification Period (Clause 2.25): A set timeframe (usually 6 or 12 months) where you have to return and fix legitimate snags in your trade scope at your own cost.
- Final Release (Remaining 50% – Clause 4.18): Triggered the moment the Rectification Period ends and the formal Notice of Completion of Making Good is issued.
2. Plain English Translation: What PC Actually Means on Site
Practical Completion doesn’t mean absolute perfection with zero tiny snags. It means your trade works are functionally finished and free from obvious defects that stop the building from being used.
Once you finish your scope on site, you must ask for written confirmation of Subcontract Practical Completion. If minor snagging items remain, they get listed on a schedule to be sorted during the Defects Liability Period, but they cannot legally be used to hold onto your initial 50% retention release.
3. Loss Aversion: The “Main Contract PC” Retention Trap
The single most dangerous trap for trade subbies is signing a subcontract where Schedule 2 quietly ties your retention release to Main Contract Practical Completion instead of your own Subcontract Practical Completion.
If you run an early trade like groundworks, piling, demolition, or steel framing, your package might finish in Month 3 of a 36-month build. Under a standard unamended contract, your first retention release is due in Month 3. But under an amended “Main Contract PC” clause, the main contractor holds your 5% cash for three full years until the entire development is handed over to the client.
If the main contractor goes bust during those three years, your unsegregated retention money is wiped out in administration. You become an unsecured creditor with zero chance of recovery, triggering devastating revenue loss.
Frequently Asked Questions About JCT Practical Completion and Retention
Can a main contractor hold 100% retention until the entire site completes?
Under standard unamended JCT subcontracts, no. The first 50% must be released at Subcontract Practical Completion. However, bespoke amendments frequently alter this rule, which is why checking your subcontract particulars before signing is critical.
What is the standard Rectification Period in a JCT contract?
The default Rectification Period (historically called the Defects Liability Period) is typically 6 or 12 months from the date of Practical Completion, as stated in the Subcontract Particulars.
Can retention be withheld without a Pay Less Notice?
No. If retention is due for release under the contract timetable, the main contractor cannot withhold it without issuing an effective Pay Less Notice detailing the contractual basis and calculation for the deduction before the final date for payment.