Tennessee retainage
Retainage in Tennessee — Sources checked
Who and what this applies to
Nonresidential construction contracts covered by Tennessee’s Prompt Pay Act, including T.C.A. 66-34-103, with separate TDOT contract specifications.
Thresholds and scope
Covered contractual retainage is capped at 5% of contract amount; TDOT’s 2026 specifications prohibit progress retainage.
The rules
- For covered contracts, T.C.A. 66-34-103 caps retainage at 5% of the contract amount, requires owner release for completed work within 90 days after completion or substantial completion, whichever occurs first, and requires payment to subcontractors within ten days after receipt. Source
- For contracts incorporating the 2026 TDOT Standard Specifications, §109.08 says TDOT will not withhold contractor retainage; §109.02 prohibits contractor/downstream retainage from subcontract progress payments. Source
Deadlines
General release rule 90 days; passed-down retainage 10 days. TDOT specified progress payments have no retainage.
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 Tennessee contractor law · Retainage topic guide.
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