December 2023

Viewpoint: Retentions
TIME FOR ROOFERS TO PROFIT FROM
ROLLBACK OF RETENTION PROCESS
The retention process remains a source of contention across the building industry. The
practice means clients can withhold paying contractors up to 5% of a contract’s value
until their works are completed. This, along with the 12-month liability period, which is
often extended by residential developers to cover potential maintenance visits, means it
can take contractors up to four years from a project’s completion to receive full payment.
In this feature, Tony Lawther, Managing Director of leading commercial roofing contractor
BriggsAmasco, makes a case for abolishing the retention process, which he feels is
stifling the growth of smaller, less-established building contractors.
Following a most challenging 18 months or
so for the construction industry – perhaps
the most challenging I’ve known during my
time in the sector – the first quarter of 2023
brought an air of positivity. We saw a month-onmonth
fall in fuel prices and building product
prices stabilised as raw materials became more
available. This brought greater certainty to the
procurement process, allowing manufacturers,
contractors and the like to provide more medium
and long-term project pricing.
Aid to recovery
I believe this recovery will be aided by a change
to Tier One contractors’ payment practices,
particularly in respect of retentions. It’s an issue
I’ve long felt strongly about, and a protocol I’d like
to see banned. Traditionally, for a client or main
Tony Lawther, MD,
BriggsAmasco
contractor, the contractual withholding of
payment provides assurance that project works
will be completed and any defects that develop
shall be remedied. However, in the absence of
any hard and fast governance, over the years too
many contractors have felt obliged to retain their
payment for longer than is necessary. Indeed, the
sums on offer for smaller projects provide no real
incentive for contractors to return for
maintenance visits. The better option for
contractors and to ensure their good reputation is
upheld, is to simply address any defect issues in
line with a contract’s requirements. Hence,
retention has become an unfair practice that has
invariably led payees into a seemingly ceaseless
chase to receive outstanding monies that is
rightfully theirs.
It is estimated that in England, the construction
industry holds between £3.2 and £5.9 billion in
Continued on page 28
26 TC DECEMBER 2023