Punch and closeout retainer

Definition

Money held back to the end, under a cap and a clock that only some jobs actually get.

Why It Matters

New York caps it now and the cap is recent enough to matter to a receivables book. An owner may retain no more than five percent of the contract sum, and a contractor or subcontractor may retain no more than five and never more than the owner is actually holding. Release is due within thirty days of final approval of the work, and a late release carries interest at one percent a month. Before November 2023 the statute said a reasonable amount and stopped there, so a book of jobs carries whichever rule was in force when each one was signed. The scope limit decides whether any of it applies: the article reaches projects of a hundred and fifty thousand dollars or more, and excludes public work. It also excludes one to three family dwellings, residential tracts of up to a hundred one or two family homes, and residential projects of forty five hundred square feet or less. A shop doing custom homes is largely outside the statute it looks protected by.