Work completed. Money earned. Payment lost.
The Government’s proposal to prohibit construction retentions raises an important question: why should contractors wait 12 months or longer to receive money they’ve already earned? While clients need protection against defects, the current system often places an unfair financial burden on contractors.
At Grove Construction, we’ve proposed escrow accounts as a fairer alternative, protecting both parties by ring-fencing funds. However, we’ve repeatedly faced resistance. In the past four years alone, we’ve lost retention payments on four projects because the businesses holding the money became insolvent.
Surely there’s a better way? Should construction retentions be abolished, and what should replace them?
What do you think? Let us know!
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