A new Illinois law sets the maximum retainage clients can withhold from contractor payments on private projects.
The change went into effect on August 20, and is expected to help many general contractors and subcontractors receive bigger checks earlier in the project timeline.
The new rule forbids customers from withholding more than 10% retainage from contractor payments, and orders retainage to be reduced to 5% after a contractor has completed half of the work.
The new law applies to all construction contracts. Twenty states have enacted legislation that caps private contract retainage at 10% or less. One state, New Mexico, prohibits any retainage from being withheld from a construction contract.
The legislation can be considered a codification of what already is standard industry practice. But, it should provide some relief because general contractors and subcontractors will be able to pay bills sooner with the additional 5%.
Related Stories
Contractors | Jun 2, 2015
Weather to blame for decline in Construction Backlog Indicator
Following an intense winter season, the Associated Builders and Contractors' Construction Backlog Indicator (CBI) revealed a 3.2% decline during the first quarter of 2015.
Contractors | Jun 1, 2015
Nonresidential construction spending surges in April
Nonresidential construction is up by a solid 8.8% over the past year, consistent with ABC's forecast of high single-digit growth.
Multifamily Housing | Jun 1, 2015
Sacramento moves forward on multifamily project with new modular supplier
Guerdon Modular Buildings will provide modules for 118 apartments.
BIM and Information Technology | May 27, 2015
4 projects honored with AIA TAP Innovation Awards for excellence in BIM and project delivery
Morphosis Architects' Emerson College building in Los Angeles and the University of Delaware’s ISE Lab are among the projects honored by AIA for their use of BIM/VDC tools.
Healthcare Facilities | May 27, 2015
Rochester, Minn., looks to escape Twin Cities’ shadow with $6.5 billion biotech development
The 20-year plan would also be a boon to Mayo Clinic, this city’s best-known address.
BIM and Information Technology | May 21, 2015
How AEC firms should approach BIM training
CASE Founding Partner Steve Sanderson talks about the current state of software training in the AEC industry and common pitfalls in AEC training.
Architects | May 20, 2015
Architecture billings remain stuck in winter slowdown
Regional business conditions continue to thrive in the South and West
University Buildings | May 19, 2015
Special Report: How your firm can help struggling colleges and universities meet their building project goals
Building Teams that want to succeed in the higher education market have to help their clients find new funding sources, control costs, and provide the maximum value for every dollar.
University Buildings | May 19, 2015
Renovate or build new: How to resolve the eternal question
With capital budgets strained, renovation may be an increasingly attractive money-saving option for many college and universities.
University Buildings | May 19, 2015
KU Jayhawks take a gander at a P3 development
The P3 concept is getting a tryout at the University of Kansas, where state funding for construction has fallen from 20% of project costs to about 11% over the last 10 years.
