Florida Retainage Laws for Construction
Florida generally caps retainage at 5% on covered state/public-entity and local-government contracts, but exceptions and closeout rules matter. Private construction uses a different, more contract-dependent framework.
Research status: Last researched September 1, 2026 from the 2026 Florida Statutes and federal sources linked below. Prepared by the PayAppPro editorial team. This page has not been reviewed or approved by a lawyer. Review schedule: quarterly and after relevant Florida legislative changes.
Important legal-information disclaimer
This is general educational information derived from public sources, not legal advice, a legal opinion, or a substitute for Florida construction counsel. PayAppPro is not a law firm and has not reviewed your contract, funding, project value, completion events, punch list, notices, bond, payment chain, or dispute.
Do not calculate a deadline or decide whether money may be withheld or must be released from this page. Verify the current statute and contract and obtain qualified legal advice for an actual project or claim.
Florida retainage at a glance
| Project category | Public-information summary | Start with |
|---|---|---|
| Covered state/public-entity contract over $200,000 | Generally no more than 5% of each progress payment. Lower rates, scheduled reductions, and early release are permitted. | Fla. Stat. §§ 255.077–255.078 |
| Covered local-government contract over $200,000 | Generally no more than 5% of each progress payment, with closeout and payment procedures. | Fla. Stat. § 218.735 |
| Public contract of $200,000 or less | The public percentage provisions cited above expressly exclude these contracts. The contract and other law still govern. | §§ 255.078(6), 218.735(8)(f) |
| Private improvement under a covered written contract | The parties may agree to withhold part of progress payments. The cited private statute does not state the same general 5% public-project cap and contains detailed payment, interest, and milestone rules. | Fla. Stat. § 715.12 |
| Direct federal contract | Federal clauses govern; FAR 52.232-5 permits up to 10% when satisfactory progress has not been achieved. | Contract and FAR 52.232-5 |
State and other public-entity construction
Florida Statutes § 255.078 generally says a public entity may withhold no more than 5% of each progress payment as retainage. It allows a lower rate, incremental reduction, or release of all or part of retainage. When released funds are attributable to subcontractor or supplier work, the contractor must timely remit them downstream.
Important qualifications
- A written good-faith dispute or a claim under § 255.05 can permit continued withholding under the statutory conditions.
- The 5% provision does not apply to federally funded construction subject to contrary federal grant requirements.
- The section does not apply when the identified contract cost is $200,000 or less.
- The statute notes that specified changes do not apply to Chapter 337 transportation contracts; transportation work requires separate review.
Closeout and remaining retainage
Florida Statutes § 255.077 requires public construction contracts to establish a closeout-list process. For projects below $10 million, the list is generally developed within 30 calendar days after the contractual substantial-completion point or, if undefined, beneficial occupancy or use. For projects of $10 million or more, the statute allows a contractual extension up to 45 days.
After development of the list and receipt of a proper request, the statute generally requires payment of the remaining balance and retainage within 20 business days, less up to 150% of the estimated cost to complete listed items. Good-faith disputes, contractor noncooperation, and other statutory provisions can alter the result.
Local-government construction
Florida Statutes § 218.735 is the local-government prompt-payment provision. The 2026 text generally caps retainage at 5% of each progress payment on covered contracts, permits lower or reduced rates and early release, and contains the same $200,000-or-less and contrary-federal-requirements qualifications.
The section also contains detailed invoice review, rejection, downstream payment, closeout-list, remaining-balance, dispute, and interest provisions. For example, the closeout provisions generally limit continued withholding for listed incomplete items to 150% of estimated completion cost and restrict using warranty or insurance-audit issues to delay retainage under the specified conditions.
Private construction
Florida Statutes § 715.12 applies to specified written contracts to improve real property for which a Chapter 713 construction lien is authorized. It permits an owner and contractor to agree that part of progress payments will be withheld until substantial completion and contains rules connecting final payment and retainage to specified events involving certification, a certificate of occupancy, possession, and punch-list completion.
The statute generally provides a 14-day payment period after the specified conditions are met and addresses interest when retained funds remain unpaid. It also permits other contracting tiers to agree to retainage until project completion and provides a securities-substitution mechanism.
Do not import the public 5% cap into private work without analysis. Section 715.12 does not express the same general 5% percentage limit found in §§ 255.078 and 218.735. Contract language, lien eligibility, payment-chain facts, milestones, and other laws matter.
Federal and federally assisted work
For a direct federal fixed-price construction contract, FAR 52.232-5(e) provides for full payment when satisfactory progress is achieved and permits the contracting officer to retain up to 10% when it has not. FAR 32.103 says retainage should be case-specific.
The Florida public statutes themselves recognize that contrary federal grant requirements can affect the state/local percentage rule. Identify whether funds are federal and review the incorporated grant and contract terms.
What billing teams should verify
- Private, state/public-entity, local-government, transportation, direct federal, or federally assisted status
- Total contract value and the $200,000 threshold
- For public work, whether § 255.077 or § 218.735 closeout procedures apply
- Substantial-completion, beneficial-occupancy, possession, certificate, list, and payment-request dates
- Written disputes and the amount tied to incomplete items
- Downstream payment and contract flow-down requirements
PayAppPro can track retainage and produce consistent billing records. It cannot determine which statute applies, whether a payment request is legally proper, or when retained funds are legally due.
Official sources
- Florida Statutes § 255.078 — public construction retainage
- Florida Statutes § 255.077 — public-project closeout and retainage
- Florida Statutes § 218.735 — local-government construction payments
- Florida Statutes § 715.12 — private Construction Contract Prompt Payment Law
- FAR 52.232-5 — direct federal fixed-price construction
Source review date: September 1, 2026. The Florida links displayed the 2026 statutes when reviewed. Verify again before use.
Frequently asked questions
Is Florida public-project retainage capped at 5%?
Generally yes on covered state/public-entity and local-government contracts, but the $200,000 threshold, federal-funding qualification, disputes, and specialized contracts require attention.
Is private retainage also capped at 5%?
Do not assume so. The cited private statute permits agreed retainage but does not state the same general 5% cap.
Can PayAppPro calculate the legal release deadline?
No. It can record billing dates and amounts; the legal result requires the contract, statute, and project facts.
Has a Florida lawyer reviewed this page?
No. It is based on linked public information and is not legal advice.
Related retainage resources
Retainage Laws by State · California · Texas · Florida · Michigan · New York · Retainage billing calculations