When must JCT subcontract retention be released? Under standard JCT subcontract Clause 4.18, 50% of your retention must be released on Practical Completion of your subcontract works. The remaining 50% is due following the expiry of the Rectification Period and issue of the Notice of Completion of Making Good. Main contractors frequently amend this clause to delay payment until the entire main project is handed over.
Contractor Withholding Your Retention on a Pay Less Notice?
Main contractors cannot invent phantom defect costs or hold retention past contractual due dates without an operative Pay Less Notice supported by clear arithmetic calculations under Section 111. Reclaim your trapped cash using my statutory dispute pack.
- Formal Section 111 Statutory Rebuttal Notice (.docx)
- Section 110B Default Demand Notice (.docx)
- 10-Point Pay Less Notice Statutory Validity Checklist (.pdf)
- Section 112 7-Day Notice of Intention to Suspend (.docx)
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Every penny of your £37 purchase is credited directly against Trade Contracts Simplified. Because I handle subcontractor onboarding personally, simply email me at steve@yourtechneighbour.co.uk with the subject “Claim £37 Retainer Credit”, quoting your purchase email address. I will configure your account and send your direct link to secure your first month of unlimited contract scans for just £12.00.
1. Technical Authority: Clause 4.18 Release Mechanics
Under unamended JCT Subcontract rules (such as SBCSub and DBSub Clause 4.18), the retention fund is released in two clear stages:
- First Release (50%): Due on the date of Practical Completion of the subcontract works, included in the next interim payment cycle under Clause 4.8.
- Second Release (Remaining 50%): Due following the expiry of the Rectification Period (typically 12 months) and issue of the Notice of Completion of Making Good.
- The Pay Less Notice Requirement: If the main contractor wants to withhold any part of your retention for alleged defects, they must serve a formal Pay Less Notice with transparent arithmetic calculation under Section 111. Audit their notice using my invalid Pay Less Notice checklist.
2. Plain English Translation: How Retention Gets Trapped
Retention is usually 3% to 5% of your contract value. In construction, that 5% represents your entire profit margin on the job.
On site, commercial managers frequently claim: “We cannot release your retention because the client has not issued the main contract certificate yet.” Under an unamended JCT subcontract, this is legally incorrect. Your first release is pegged to your works completing, not the main building.
When you finish your package, apply for your first 50% release immediately. If the contractor instructed extra works or variations on verbal instructions, confirm them using my free Clause 3.14 CVI tool so those values are permanently included in your final retention calculation.
3. Loss Aversion: Upstream Insolvency & Trapped Margins
Allowing unamended retention release dates to slip creates direct commercial revenue loss:
- Insolvency Write-Offs: If a main contractor goes into administration while holding your retention, that money is pooled with general creditors. You will almost never recover it.
- Manufactured Defect Deductions: Years after leaving site, commercial teams routinely manufacture contra-charges to avoid paying out the second retention half. See my guide to defending against unlawful set-offs and contra-charges.
- Working Capital Squeeze: Carrying £10,000 to £50,000 of locked retention per job starves your company of cash flow needed for materials and wages on new projects.