What were some of the problems with construction retentions before 1 October 2011?

The Housing Grants Construction and Regeneration Act 1996 outlawed “pay when paid” arguments for payments in construction contracts. It stated that the release of money could not be delayed by an event that occurred under another contract, such as the main contract on the project.

Prior to that date, a contractor could withhold the retention money for an issue that had nothing to do with the subcontractor’s work under their contract.

The legislation states that it is only possible to withhold retention monies if there is an event or incident related explicitly to the subcontract. Occurrences that take place under the main contract — or another contract the subcontractor is a party to —  are no longer valid grounds to withhold a retention payment.