Easily Insert Currency from the Retention Agreement

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Below are some common questions from our customers that may provide you with the answer you're looking for. If you can't find an answer to your question, please don't hesitate to reach out to us.

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What is the treatment of retention money?

Retention payable is recorded by owners and general contractors and is the amount owing to contractors or subcontractors for retention. Since these funds arent due until the project is completed, they are recorded in a separate account on the general ledger.

What do you mean by retention money in contract?

A standard definition of retention money is a percentage of money that an employer or an individual holds as protection from incomplete or inaccurate work done by the hired contractor. A retention includes two levels: The hiring individual holds the money until the contract is fulfilled, and he or she is satisfied.

What can retention money be used for?

Retention is an amount of money withheld from a contractor until a job is complete. This normally is 5-10% of the contracts sum. It acts as a kind of security deposit: if defects are left by the contractor that they fail to remedy, the money is rightfully retained by the employer to fix those defects.

How do you release retention money?

Usually, retention monies are released in 2 stages of the project. Release of the first half of the Retention Monies. at the time of issuing the Completion Certificate, The first half of the Retention Monies will be certified and released. Release of the second half of the Retention Monies.

When can retention money be released?

Release of the second half of the Retention Monies In most construction contracts, the Defects Liability period is 12 months which the contractor is liable to complete any defects arise due to the poor workmanship. Upon issuance of Maintenance Certificate, the 2nd half of Retention Money will be released.

How do I account for retention money?

Retention payable is recorded by owners and general contractors and is the amount owing to contractors or subcontractors for retention. Since these funds arent due until the project is completed, they are recorded in a separate account on the general ledger.

How do you write a retention release letter?

Sub: Regarding release of retention money With reference to ourcontract no. 1234 related to Museum Building Construction. Since the project has now been completed, we request you to release the retention money that was paid against the order no. 1155.

How do I claim retention?

To claim your retention money, ensure that you have completed your work to building standards and include the retained amount in your payment claim. It is your right to be paid for the work you have done, as agreed upon in the subcontractor agreement.

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Insert Currency from the Retention Agreement