Retention Money

Definition

A percentage of each interim payment (typically 5-10%) withheld by the employer as security for the contractor's obligation to remedy defects during the Defects Notification Period (DNP). Under FIDIC 2017, half the retention is released at the Taking-Over Certificate and the remainder at the Performance Certificate (after expiry of the DNP, typically 12-24 months). Retention disputes are common in the GCC when employers withhold retention beyond the contractual release dates, use retention to offset disputed claims, or refuse release citing alleged defects the contractor contests.