North Carolina retainage
Retainage in North Carolina — Sources checked
Who and what this applies to
Covered public construction; excludes DOT contracts under section 136-28.1.
Thresholds and scope
Below $150,000: no retention. Otherwise owner retention is capped at 5%.
The rules
- At 50%, further retention normally stops with surety consent, satisfactory performance and corrected nonconforming work. Section (b3) allows continued withholding up to 5% of payments to maintain 2.5% total retention. Source
- Release follows within 60 days after pay request and the contract’s substantial-completion or beneficial-occupancy trigger, with surety consent; unfinished/correction reserves are capped at 2.5 times estimated cost. Federal-conflict exceptions apply. Source
Primary sources
Sources reviewed 2026-09-30. This guide covers the projects and rules stated above.
Not legal advice. This is general legal information. Laws and project facts differ; confirm the applicable requirements for your project.
Back to North Carolina contractor law · Retainage topic guide.
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