title page C-Link

3 July 2018

Get your Retention

Blog Image

When I was 18, before heading off to University, I spent the summer working for my Dad’s roofing business. My job was mostly admin and paperwork, but I was also tasked with collecting old retentions.

My Dad came from ‘the tools’. He was a Lead Worker turned surveyor. He was great at identifying solutions to roofing problems, but not so great at paperwork and keeping track of the commercial aspects of the business. So, there were a lot of old unpaid retentions.

We were a small business turning over just under £1 million, and unpaid retentions added up to around £20,000. To a business turning over £1 million, £20,000 is a large chunk of net profit.

I had no commercial construction experience and naively assumed it would be a case of contacting these businesses and the money would follow. I managed to make contact with most that owed us money, and each very kindly informed me that they would look into it and organise payment.

Of course, that didn’t happen! After a couple more phone calls, it was left to the Gods whether these Main Contractors would pay and pretty soon I’d be off to Uni.

The fact is that if you know how to secure your retention, it’s really simple to do so. But, if you don’t know the steps, Main Contractors will use that as an opportunity to withhold money that is rightfully yours. In the situation with my Dad’s roofing business, the Main Contractors that didn’t need chasing had already paid. The £20,000 left over was with companies who would only pay if we left them no option.

The following steps and resources show you how to leave them with no option other than to pay up.

Step 1

Before we even begin talking about chasing retention, it’s critical that you first maintain records on each project. Specifically, you need to keep every Application and Payment Certificate. This will ensure that when the time comes to claim retention, you have the correct paperwork and numbers.

I also like to keep a Retention Chasing Schedule. This will give you reminders and clear dates when to go after retentions. You finish the job, add the details to the schedule, then you can set and forget until it’s due (at the end of this post you can click the link to get a copy of our Retention Schedule).

Step 2

When the retention is due, make contact with the contractor. Establish the point of contact, first trying the QS that you dealt with on the project. If you can’t get hold of that person, send an email to the company regarding the contract and requesting retention release. At this stage, you’re just sending the Application as a request for payment – nothing more than that.

Step 3

If you don’t receive a response within 7 days, send (by email and post) Letter 1 Template (see link at the end of this post to get the template and application for retention release.

Follow up with another phone call to your contact or the commercial department.

Step 4

If you don’t receive a response from Letter 1 within 7 days, make contact again with the QS or Commercial Department. If you are unable to reach them by phone, send another email recording your telephone attempt along with a message regarding the outstanding retention. If you managed to make contact by phone, send an email confirming and summarising your discussion immediately after the phone call.

Step 5

If you don’t receive a response from the previous email within 7 days, send (by email and post) Letter 2 along with relevant back up (i.e. emails, letters, applications, payment certificates, etc.). Again, see the link at the end of this post to get Letter 2 Template.

Step 6

If you don’t receive a response from Letter 2 within 7 days, issue a final email confirming that you will start legal proceedings in order to recover the debt. The simplest way to do this is via a debt collection agency. This isn’t a disputed debt. This is simply a matter of overdue debt, which a debt collection agency will be able to pursue on your behalf with ease. Alternatively, if you want to pursue this yourself, you can commence with a statutory demand to recover the debt.

What if they claim that my work is faulty?

Most Defects Liability Periods last 12 months – but always check your contract. Within that year, your client must inform you of any Latent Defects in the work and must give you the chance to remedy them if they’re your fault.

The Main Contractor must issue notice during the 12 months’ and must give you the chance to remedy any defect. If they don’t, they have no grounds to refute payment of your retention. They had one year to identify defects, and now according to the terms of the Contract, payment of retention is due.

Get the Templates

Previously I’ve referred to Letter Templates 1 and 2, as well as the Retention Chasing Schedule. If you’d like copies of these templates, just get in touch via email and we’ll send them over.

C-Link Logo

Loss and Expense and LAD’s in JCT Contracts