What is the standard retainage percentage typically held on public construction projects in Florida?
Correct Answer
C) 5%
Florida Statute 218.735 limits retainage on public construction projects to 5% of the amount of each progress payment. This protects contractors from excessive retainage while ensuring owner security.
Why This Is the Correct Answer
Florida Statute 218.735 specifically limits retainage on public construction projects to a maximum of 5% of each progress payment. This statutory requirement applies to all public construction contracts in Florida and was established to balance the owner's need for security against project completion while protecting contractors from excessive cash flow restrictions that could harm their ability to complete work.
Why the Other Options Are Wrong
Option A: 10%
15% retainage is far above the legal limit for Florida public construction projects and would violate Florida Statute 218.735. Such excessive retainage would severely impact contractor cash flow and is prohibited by state law. This percentage might apply in some private contracts but never on public projects in Florida.
Option D: 15%
7.5% retainage exceeds the statutory maximum allowed on Florida public construction projects. Florida Statute 218.735 caps retainage at 5%, making any percentage above this threshold illegal for public contracts. This percentage might be confused with other states' requirements but does not apply in Florida.
Memory Technique
Remember 'Florida Five' - Florida public projects are limited to 5% retainage maximum by state statute.
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