South Dakota retainage

Who and what this applies to

Public improvements under SDCL chapter 5-18B; separate county-building rule under section 7-25-10.

Thresholds and scope

Chapter 5-18B requires an amount sufficient to complete the improvement to be retained from final payment; it does not set a universal percentage in section 5-18B-11.

The rules

• For chapter 5-18B public improvements, final retainage is held until full performance and agency acceptance. After required records, reports and final inspection, interest begins 30 days after completion shown by professional acceptance or use/occupancy; federal-payment delay has a separate trigger. Source
• If interim progress-payment money is retained, interest begins 30 days after the required records, reports and progress inspection. The rate set by the agency may not fall below the statutory Category E rate. Source
• Category E is 4% per year; Category A is 4.5% per year. Source
• County building contracts under section 7-25-10 have a different minimum-retention schedule: 12% of the first $50,000, 5% of the next $200,000, and 2.5% above $250,000, held until completion and county acceptance. Source

Deadlines

Chapter 5-18B interest: generally 30 days after the specified completion/inspection conditions; this is not an unconditional 30-day release rule.

Primary sources

• 5-18B-11.html
• 54-3-16.html
• 7-25-10.html

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

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