{"id":160,"date":"2014-11-06T17:01:59","date_gmt":"2014-11-06T22:01:59","guid":{"rendered":"https:\/\/www.bowditch.com\/bowditchrealestateblog\/?p=160"},"modified":"2022-01-27T09:43:29","modified_gmt":"2022-01-27T14:43:29","slug":"new-massachusetts-retainage-law-in-effect-for-private-construction-contracts-on-november-6-2014","status":"publish","type":"post","link":"https:\/\/www.bowditch.com\/bowditchrealestateblog\/2014\/11\/06\/new-massachusetts-retainage-law-in-effect-for-private-construction-contracts-on-november-6-2014\/","title":{"rendered":"New Massachusetts Retainage Law In Effect For Private Construction Contracts On November 6, 2014"},"content":{"rendered":"<p><a href=\"https:\/\/www.bowditch.com\/lawyers\/mary-t-feeney\" target=\"_blank\" rel=\"noopener noreferrer\">Mary T. Feeney<\/a> &#8211;\u00a0The new \u201cRetainage Act\u201d (G.L. c. 149, Section 29F) is in effect for private construction contracts entered into on or after November 6, 2014 for projects where the prime contract with the owner has an original price of $3,000,000 or greater, excluding contracts for residential projects of not more than 4 dwelling units.\u00a0 The Act applies to subcontracts of a lesser value if the prime contract has a value of $3,000,000 or more.<\/p>\n<p>Here are the key provisions of the Act:\u00a0 No more than 5% may be withheld from a progress payment as retainage to ensure performance. Retaining 10% until 50% completion and then reducing retainage to 0% does not comply with the Act.\u00a0 Substantial completion (defined in the Act) occurs when the contractor, not the architect, issues a notice of substantial completion to the owner. The Act imposes a rigid timeline for owner\u2019s acceptance or rejection of substantial completion (and if not met the project is \u201cdeemed\u201d substantially complete), when dispute resolution procedures <span style=\"text-decoration: underline\">must <\/span>be started, when punchlists <span style=\"text-decoration: underline\">must<\/span> be generated, when retainage <span style=\"text-decoration: underline\">must <\/span>be paid.\u00a0 The owner\u2019s rights to continue to hold retainage at the end of the project are limited to the specific circumstances in the Act \u2013 for missing or incomplete deliverables, for up to 150% of the cost of incomplete work, for the value of certain types of claims.\u00a0 The parties are not allowed to agree to different terms \u2013 those would be \u201cvoid and unenforceable.\u201d \u00a0A copy of the Act is <a href=\"http:\/\/c.ymcdn.com\/sites\/associatedsubs.site-ym.com\/resource\/resmgr\/Legislative\/RetainageLaw_Ch276-Acts2014.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a> and a more detailed summary is <a href=\"https:\/\/www.bowditch.com\/sites\/default\/files\/files\/Retainage%20Summary%20Mary%20Feeney%2003158410.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>.\u00a0<a href=\"https:\/\/www.bowditch.com\/commercial\/wp-content\/uploads\/sites\/4\/2014\/11\/New-MA-Retainage-Law-Summary-Mary-Feeney-Bowditch-and-Dewey.pdf\"><br \/>\n<\/a><\/p>\n<p>Owners and contractors must revise their forms for private construction projects in Massachusetts to comply with the mandatory terms of the Act.\u00a0 New contract terms should \u00a0provide as much clarity as possible to the required procedures and obligations of the owner and contractor \u00a0especially in the project completion and close-out process and to describe a process for dispute resolution.\u00a0 Please contact <a href=\"https:\/\/www.bowditch.com\/lawyers\/mary-t-feeney\" target=\"_blank\" rel=\"noopener noreferrer\">Mary T. Feeney<\/a> for more information.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mary T. Feeney &ndash;&nbsp;The new &ldquo;Retainage Act&rdquo; (G.L. c. 149, Section 29F) is in effect for private construction contracts entered into on or after November 6, 2014 for projects where the prime contract with the owner has an original price of $3,000,000 or greater, excluding contracts for residential projects of&hellip;<\/p>\n","protected":false},"author":109,"featured_media":166,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-160","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>New Massachusetts Retainage Law In Effect For Private Construction Contracts On November 6, 2014 - Commercial Real Estate Insight &amp; News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bowditch.com\/bowditchrealestateblog\/2014\/11\/06\/new-massachusetts-retainage-law-in-effect-for-private-construction-contracts-on-november-6-2014\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Massachusetts Retainage Law In Effect For Private Construction Contracts On November 6, 2014 - Commercial Real Estate Insight &amp; News\" \/>\n<meta property=\"og:description\" content=\"Mary T. Feeney &ndash;&nbsp;The new &ldquo;Retainage Act&rdquo; (G.L. c. 149, Section 29F) is in effect for private construction contracts entered into on or after November 6, 2014 for projects where the prime contract with the owner has an original price of $3,000,000 or greater, excluding contracts for residential projects of&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.bowditch.com\/bowditchrealestateblog\/2014\/11\/06\/new-massachusetts-retainage-law-in-effect-for-private-construction-contracts-on-november-6-2014\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Real Estate Insight &amp; News\" \/>\n<meta property=\"article:published_time\" content=\"2014-11-06T22:01:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-27T14:43:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.bowditch.com\/bowditchrealestateblog\/wp-content\/uploads\/sites\/4\/2014\/11\/iStock_000036126748Large.png\" \/>\n\t<meta property=\"og:image:width\" content=\"100\" \/>\n\t<meta property=\"og:image:height\" content=\"100\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Bowditch &amp; 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