§ 38-46-103. Private Construction Contracts – Retainage – Conditions Precedent

1. A property owner, contractor, or subcontractor shall not withhold as retainage more than five percent of the price of the work completed under the contract or subcontract. Making a partial payment under this subsection (1) is not acceptance or approval of some of the work or of a waiver of defects in the work.
2. This article 46 addresses only the amount of retainage that may be withheld by a property owner, contractor, or subcontractor and does not change, override, or invalidate any other provision in a contract, subcontract, or supply agreement. Such a provision includes, but is not limited to:
   1. A provision relating to timing of a payment, including final payment;
   2. A provision requiring satisfactory performance of the work of the contract, subcontract, or supply agreement before payment is due;
   3. A provision allowing a property owner, contractor, or subcontractor to withhold payment or deduct from any payment otherwise due any backcharges or other amounts as authorized by the contract, subcontract, or supply agreement; or
   4. A provision relating to a condition precedent that must be satisfied before a payment is due to a contractor, subcontractor, sub-subcontractor, or supplier. A condition precedent includes a requirement that:
      1. A contractor must actually receive payment from the property owner to be obliged to make payment to a subcontractor or supplier; or
      2. A subcontractor must actually receive payment from the contractor to be obliged to make payment to a subsequent subcontractor or supplier.

Source: L. 2021: Entire article added, (HB 21-1167), ch. 146, p. 861, § 1, effective September 7.