When is the final release of retainage typically made to the contractor?
Correct Answer
C) After final completion and acceptance
Retainage is typically held until final completion and acceptance of all work, including correction of any punch list items. This ensures the owner has security for any remaining work or warranty issues.
Why This Is the Correct Answer
Final release of retainage occurs after final completion and acceptance because this is when all work is truly finished, including punch list corrections and any warranty issues. The owner needs security until the project is completely done and accepted, not just substantially complete. Retainage serves as the owner's protection to ensure the contractor completes all remaining work and addresses any defects before final payment.
Why the Other Options Are Wrong
Option A: 30 days after substantial completion
Substantial completion means the project is functional but may still have punch list items or minor work remaining. Releasing retainage at this point would eliminate the owner's leverage to ensure completion of remaining work.
Option B: Upon receipt of Certificate of Occupancy
This arbitrary 30-day timeframe has no basis in standard construction practice or Florida law. Retainage release is tied to completion of work, not calendar dates after substantial completion.
Option D: At substantial completion
While a Certificate of Occupancy is important, it doesn't guarantee all contract work is complete. There may still be punch list items, landscaping, or other work remaining that needs to be finished before final payment.
Memory Technique
Think 'FINAL retainage for FINAL completion' - both words match, making it easy to remember that final release comes with final completion and acceptance.
Reference Hint
Florida Building Code Chapter 1, Section 107 - Inspections and approvals; Construction contract law references in Florida Statutes Chapter 713
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