Minnesota retainage

Who and what this applies to

Private building/construction contract retainage under section 337.10 subdivision 4. That subdivision excludes public agencies and the identified professional-service contracts.

Thresholds and scope

Retainage may not exceed 5%; the section does not require retainage.

The rules

• If the owner reduces retainage, the contractor must reduce downstream retainage at the same rate. Source
• Release is due no later than 60 days after substantial completion, subject to the statutory allowed withholding. A contractor passes remaining retainage through within ten days after receipt, paying undisputed subs and supplying the required written explanation for a disputed withholding. Source
• After substantial completion, permitted withholding is limited to 250% of known correction/completion cost plus the greater of 1% of contract value or $500 for final paperwork, with a written basis. Those amounts release within 60 days of completion/submission; warranty-work retainage is prohibited. Source

Primary sources

• Minn. Stat. §337.10 subd.4(b)
• Minn. Stat. §337.10 subd.4(c)-(d)
• Minn. Stat. §337.10 subd.4(e)-(i)

Sources reviewed 2026-09-30. This guide covers the projects and rules stated above.

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