Contractors routinely complain about retainage being withheld for extended periods of time, well beyond the project’s substantial completion date. This problem seems to be getting worse every year.

Contractors on public work in Ohio should understand that, regardless of what the contract says, public owners are to pay escrowed retainage funds, together with accumulated interest, to the contractor no later than thirty (30) days “from the date of completion, or either acceptance or occupancy by the owner,” pursuant to Ohio Revised Code 153.13. And when public owners fail and refuse to pay the escrowed retainage in a timely fashion, contractors are permitted to take action either in (1) the Court of Claims or in (2) arbitration (depending on what public owner is involved with the escrow account) to force the payment of the retainage. Contractors should keep these statutory tools in mind the next time a public owner wants to hold on to the retainage well beyond the time the owner has occupied the building.

Once the contractor receives the retainage, he is to pay it to his subcontractors within ten (10) calendar days, pursuant to Ohio’s Prompt Payment Act – Ohio Revised Code 4113.61.