Vermont retainage

Who and what this applies to

Construction contracts on Vermont real property, including state/local owners through the chapter's owner definition. The chapter excludes a natural person's purchase of materials for work they perform on their own real property.

Thresholds and scope

Section 4005 establishes release rules and a material-supplier protection; it does not specify a general percentage cap.

The rules

• Retainage due to the contractor on final completion must be paid within 30 days after final acceptance. If the owner withholds no retainage, downstream retainage can be agreed but must likewise be paid within 30 days after final acceptance. Source
• A contractor or subcontractor receiving retainage must pass the amount due to its subcontractors within seven days, notwithstanding contrary agreement. Source
• Contractors/subcontractors may not retain payment for delivered, accepted materials covered by manufacturer warranty or industry grading, unless the material supplier also contracted to perform work using those materials. Source
• The chapter's owner definition includes Vermont and its instrumentalities/subdivisions, including municipalities and school districts. Source

Deadlines

Final acceptance to release: 30 days. Receipt of retainage to downstream payment: seven days.

Primary sources

• 04005
• 04001
• 04009

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

Back to Vermont contractor law · Retainage topic guide.