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Home » US Law » 2021 Tennessee Code » Title 66 - Property » Chapter 34 - Prompt Pay Act » Part 2 - Owner/prime Contractor Payment » § 66-34-203. Withholding of Payment or Retainage by Owner

This chapter does not prevent the owner from reasonably withholding payment or a portion of a payment to the prime contractor, as long as the withholding is in accordance with the written contract between the owner and the prime contractor. The owner may also withhold a reasonable amount of retainage as specified in the written contract between the owner and the prime contractor, as long as the retainage amount does not exceed five percent (5%) of the amount of the contract.