In two stages, if Option X16 is in the contract: half comes back around whole-works Completion, or the Client's take over of the whole if that is earlier, and the rest at the Defects Certificate stage. Each NEC retention release happens through the normal assessment, so there is no separate payment to ask for.
What decides the exact date is your edition, because the second stage is worded differently. The X16 clause numbers are the same, but NEC3 and the NEC4 subcontract text use different triggers. Clients often amend this Option, so that is the one thing to read first. This page is one of our NEC questions answered.
The two release points by edition
| Stage | NEC3 ECC | NEC4 subcontract text, amended 2019 |
|---|---|---|
| First half | In the assessment at whole-works Completion, or at earlier take over of the whole | In the assessment following Completion of the whole, or following take over of the whole if earlier |
| Second half | After the Defects Certificate has been issued | Once the date the Defects Certificate is due has passed |
| A late Defects Certificate | Can hold up the money | Should not hold it up |
Read X16.2 in your own NEC4 ECC against this table, because NEC issued amendments to NEC4 and your copy's date matters. Option X16 covers the Option in general.
What to do now
- Find out when the Defects Certificate is due. It depends on the defects date and on the last defect correction period (44.3). Work it out as soon as Completion is certified. The Defects Certificate definition sets out the sequence.
- Diary the two assessments that follow the triggers.
- Keep applying. Under NEC4, a Contractor must apply before each assessment date, or the amount due is limited by 50.4, which could affect the release. Assessment dates carry on until one of two certificates comes out: Defects or termination. Once the certificate is out, the final assessment (53.1) picks up anything left.
- Check each certificate's retention line against your calculation. A forgotten figure can sit in a template for months. If it is wrong, ask for a correction under 50.6.
- Dispute if needed. A retention line is part of the amount due, so it is handled like any other dispute. See when the PM certifies too little.
A dated, fictional example
NEC4 wording, a retention free amount of £250,000, retention of 3% and a Price for Work Done to Date of £3,250,000 at Completion. So 3% of £3,000,000 is £90,000 held. Periods are illustrative.
| Date | Event | Retention held | Cash effect |
|---|---|---|---|
| 12 May 2027 | Completion of the whole | £90,000 | None yet |
| 28 May 2027 | Next assessment | £45,000 | £45,000 flows back through the amount due |
| 12 May 2028 | Defects date; three Defects still open | £45,000 | None |
| 2 June 2028 | Defects Certificate due | £45,000 | Issued late, in this example |
| 30 June 2028 | Next assessment | Nil | £45,000 flows back |
What the other side might say
| Client or Project Manager says | Answer |
|---|---|
| "Defects are still open, so we're keeping it" | X16 doesn't say this. Open Defects are dealt with through correction periods and 46.1, not an open-ended hold. Under NEC3, the certificate itself can list Defects and still be issued |
| "The first section finished, but no release is due" | Right on the X16 wording, which refers to the whole of the works, even where Option X5 applies. A stage release needs a Z clause |
| "We've moved in, but we haven't reached Completion" | If the whole has been taken over, the first half is due anyway. If only part has, there is no release under X16 |
| "The final account has to be agreed first" | Not a condition in X16. Look for a Z clause |
Contract rights versus good practice
The contract says the release follows the triggers, with no separate request needed. In practice, finance teams run on what the certificate says, so one line in the certificate covering letter can save months. If you are a Client, a retention bond under NEC4's X16.3 replaces held money altogether, if allowed. If you are a Subcontractor, remember your dates come from your own X16 entries, and retention under NEC explains how these flow down the chain. Retention isn't protected in a trust account under standard wording, so if the Client's solvency looks doubtful, take advice quickly.
Related guides
- NEC Questions Answered: Real Situations on Site
- A Defect Appeared After Completion: Who Fixes It?
- A Defect Appeared After the Defects Date: What Now?
- The Contractor Will Not Fix a Defect
- Are Our Head Office Overheads Recoverable?
- Can We Add Margin on Subcontractor Costs?
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