A contractor completes a $180,000 commercial project. The owner withholds $27,000 (15%) as retainage. Under Alabama law, when must this retainage be released?
Correct Answer
D) 45 days after substantial completion
Alabama law requires retainage to be released within 45 days after substantial completion on public projects.
Why This Is the Correct Answer
Alabama law (specifically related to public construction projects) requires retainage to be released within 45 days after substantial completion. The 45-day window gives the owner time to verify completion while protecting the contractor's right to timely payment.
Why the Other Options Are Wrong
Option A: Immediately upon substantial completion
Immediate release upon substantial completion is not required under Alabama law. The statute provides up to 45 days after substantial completion — not immediate payment — to allow for final verification and administrative processing.
Option B: 60 days after final completion
60 days after final completion is not the Alabama standard. Using 'final completion' rather than 'substantial completion' also changes the trigger event. The correct timeframe is 45 days from substantial completion.
Option C: 30 days after substantial completion
30 days after substantial completion is shorter than what Alabama law requires. While some states use a 30-day window, Alabama's statute specifies 45 days.
Memory Technique
45 days = roughly 6 weeks. Think '45 days after substantial' as Alabama's retainage release rule. The phrase 'substantial 45' can help lock in both the number and the trigger.
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